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Adani Enterprises Ltd has partnered EdgeConneX, a leading data center operator to develop 1 gigawatts (GW) of data centre capacity over the next decade.

The equal joint venture (JV) named AdaniConneX will focus on building a network of hyperscale data centres in India, starting with Chennai, Navi Mumbai, Noida, Visakhapatnam and Hyderabad, the companies said in a joint statement on Tuesday. “Development and construction at the sites have already begun."

Adani Group’s diversification to data centres, powered by renewable energy, comes in the backdrop of India’s digital economy expected to touch $1 trillion by 2025.

A data centre provides the necessary secured architecture wherein computing and networking equipment is concentrated for collecting, storing, processing, distributing or allowing access to large amounts of data.

Other large corporates are also seeking to tap this opportunity. Mint on Tuesday reported on Reliance Jio Infocomm Ltd’s plans to invest around $950 million for building a large data centre in Uttar Pradesh. Reliance Jio plans to set up a renewable energy park to power the data centre.

These plans also come in the backdrop of the Reserve Bank of India’s norms on data localization necessitating the need for setting up large data centres to store and protect information. Data localization refers to storing data on any device physically present within the borders of a country where the data is generated.

“In addition to full scale data centres, AdaniConneX will also develop a portfolio of Edge data centres strategically located throughout India that will support the need for more proximate capacity. These Edge sites are designed and planned to easily scale with demand and become full scale data centre campuses. Importantly, this pan-Indian platform of hyperscale and hyperlocal data centres will largely be powered by renewable energy," according to the statement.

Adani Green Energy Ltd (AGEL) has formed an equal JV with French energy giant Total. With 3.24GW operational capacity, the JV has one of the largest green energy portfolios in India.

“India currently has one of the world’s largest data subscriber population and to address the need for a reliable infrastructure to support Cloud, Content, Network, IoT, 5G, AI and enterprise requirements, data centres are a fundamental infrastructure need of a nation," said Gautam Adani, chairman, Adani Group in the statement.

The government also plans to implement a data centre policy to encourage firms to build data centre parks across the country. This involves giving infrastructure status to the data centre sector, on par with sectors such as railways, roadways and power to enable the industry to avail benefits such as long-term credit from lenders at easier terms. Also, the Centre and state governments plan to provide fiscal and non-fiscal incentives to data centre projects.

Given that India is running the world’s largest clean energy programme, the government wants to leverage cost effective solar and wind power to supply electricity to these data centres by encouraging electricity storage applications.

India has around 375MW of installed power capacity for data centres, which is expected to grow threefold by 2025. Also, there is a $4.9 billion investment opportunity by 2025 for setting by data centre infrastructure, according to the government.

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