Datagrid Begins Southland Data Center Construction

B2B News
August 18, 2026

Datagrid has started horizontal earthworks at its 49-hectare Makarewa site in Southland, moving the proposed data center from planning into construction. HEB Construction, a VINCI Construction subsidiary, is building access to State Highway 98 and a six-meter noise bund. The foundation platform, cable landing station and power substation are expected to be completed by the end of 2026.

The first phase is planned for 280MW across six data halls occupying 9.5 hectares. A dedicated 360MVA substation would connect the campus to the 220kV transmission line between Manapouri and Tiwai. B2B News puts the initial project cost at about NZ$3.5 billion, increasing to $5 billion at full buildout.

Its direct subsea connection is what makes the coastal build relevant to the cable sector. The campus is designed around a landing station for the <a href="https://subtelforum.com/datagrid-signs-tasman-ring-subsea-cable-contract/">Tasman Ring submarine cable</a> at Oreti Beach, which is expected to become operational in 2027. That combination would pair new international capacity with a large source of local compute demand and add a high-capacity path serving the South Island.

Mercury Energy's $53 million investment for a 12.7% stake helped initiate the construction phase, although the article notes that this is equity rather than a contracted electricity supply. Power arrangements for the project's full planned load remain publicly unconfirmed, leaving energy procurement as a major delivery question even as work begins on the site and landing infrastructure.

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