How municipalities can secure local value from major data centre investments

Data centres are critical infrastructure for a digital economy and an investment that can strengthen the infrastructure and create new business opportunities to Norwegian regions. The Norwegian government’s strategy for the data centre industry confirms that data centres are regarded as critical digital infrastructure, while placing greater emphasis on security, emergency preparedness, surplus heat and limiting cryptocurrency mining.

Creating new jobs

Today, operators typically make substantial investments in buildings, electricity supply and cooling systems at around NOK 100 to 150 million per installed MW, depending on factors such as technical standards, land prices and grid connection costs.

- Data centre investments create local jobs; usually to per installed MW. In addition, municipalities could benefit from growth in existing business activity as local companies may become suppliers, fibre infrastructure may benefit other businesses, and new competence may be developed among local contractors and infrastructure providers, says Investment Manager Charlotte Hartvigsen Lem in Invest in Vestland, and adds:

- However, when municipalities are approached by data center developer they need to look beyond the size of the investment and ask what a project will actually contribute to the local economy.

Data centres can bring investment, infrastructure and new business opportunities to Norwegian regions. A practical starting point when approached by a data centre is this guide that can make sure that the projects they welcome create lasting value for the municipality and the wider region. Click illustration to download the guide. 

Pose the right questions

A great support for the municipalities or site owners is a guide from the Norwegian government that sets out a practical framework for municipalities considering data centre proposals. While the guide is not new, its core questions remain highly relevant: Who is behind the project? How much power will it require? What infrastructure is needed? What jobs and supplier opportunities could it create? And what happens if the project changes its purpose?

The guide highlights four red flags for municipalities:

• unclear or hidden ownership
• unwillingness to accept a buy-back arrangement if the project is not realised
• claims to represent major international companies without appropriate verification
• projects that conflict with established sustainability objectives in the municipality or county.

Know your customer

The guide places considerable emphasis on due diligence. Before a municipality commits significant resources to a proposal, it should establish who is making the approach and investigate the company’s ownership, finances and business model.

The distinction between different types of data centre is also important. A hyperscale facility, colocation centre, edge facility and high-performance computing centre have very different characteristics. The guide separately identifies cryptocurrency mining, which can have a large electricity demand but typically requires fewer employees and significantly less investment per MW than a conventional, redundant data centre.

A clear buy-back agreement is a practical advice can help protect the municipality against change of customer for the data centre.

Power is key

Electricity is inevitably central to any data centre discussion. This is particularly relevant when several potential industrial projects are competing for access to the same grid capacity.

The guide recommends that municipalities assess grid capacity together with other planned developments. Power-intensive industries should be considered from a regional perspective, linking industrial land with electricity demand, power production, grid capacity and other infrastructure. Regional plans can help municipalities make these priorities visible and coordinate development across municipal boundaries.

For a municipality, the relevant question is therefore not simply “Do we have enough power for this project?” but also “Is this the best use of the available capacity, and how does this project fit with other development in the region?”

Plan for surplus heat

Surplus heat must be considered from the outset. Data centres generate substantial amounts of excess heat, and the guide points to potential uses in households, businesses and other industries where this is economically viable. It recommends considering heat reuse when both the location and the detailed development plan are assessed.

A municipality considering data centre development should address the issue through its land-use planning. The guide recommends assessing access to power and infrastructure alongside potential conflicts with agricultural, environmental and other societal interests.

Infrastructure requirements can also be addressed through planning conditions and development agreements. Depending on the project, this may include roads, water and wastewater infrastructure or noise mitigation. Any contribution from the developer should be related to the infrastructure needs created by the development.

The government guide’s underlying message is straightforward: municipalities should not rush into making land and resources available before they understand the project and its potential consequences.

Further, municipalities are not only planning authorities. If they own the land, they can also use lease agreements to set conditions for how the property is used and consider what happens if the operator fails, changes its business model or leaves the site. That makes the commercial terms of a land deal important.

In a debate during Arendalsuka 2026 we discussed how the municipalities can work to maximize the value creation. Invest in Vestland has been a part of a long process between Masfjorden kommune and Kitebrook Infra in shaping a data centre in Matre, a process characterized by a long and constructive dialogue between the parties, creating the trust that is vital to optimize the value creation.

The opportunity for Vestland

The business case for data centres is stronger when an establishment becomes part of a wider industrial and digital ecosystem.

- For Vestland, that means we are looking at data centres alongside the region’s existing strengths in energy, maritime industries, technology and digitalisation, and asking where a new facility can create connections to businesses already operating in the region, says Lem.