Powering the AI Revolution: Eni and Khazna's Green Data Center Gambit

In a bid to position Italy as a European leader in AI infrastructure while tackling climate goals, Eni and Khazna Data Centers have unveiled an ambitious project: a 500 MW AI-focused data center campus in Lombardy, Italy, with plans to scale to 1 GW. The venture, launched under the UAE-Italy strategic partnership, merges hyperscale computing with decarbonized energy—a model that could redefine sustainable infrastructure investment.

The Synergy of Blue Power and AI Infrastructure

The project's cornerstone is Eni's “Blue Power,” a low-carbon electricity source generated by a new Combined Cycle Gas Turbine (CCGT) plant equipped with carbon capture technology. This system reduces CO₂ emissions by up to 90% compared to traditional fossil fuels, offering a critical edge in an industry where data centers already account for 2% of global emissions. By integrating this technology, the campus avoids the carbon-intensity of coal or even standard gas, aligning with EU climate targets while meeting the soaring demand for AI computing.

The 500 MW Phase 1 facility is optimized for high-density AI and high-performance computing (HPC) workloads. Its modular design allows phased expansion, with scalability to 1 GW embedded in the master plan. This flexibility positions the project to capture growth in Europe's AI market, projected to reach €100 billion by 2027.

Italy's AI Hub Ambition

Lombardy's selection as the site underscores Italy's strategic advantages: proximity to major tech corridors, robust academic partnerships, and a skilled workforce. The campus is also geopolitically significant, as part of a broader UAE-Italy partnership that includes renewable energy and critical minerals investments. UAE Minister Reem Al Hashimi's involvement highlights the project's role in deepening bilateral ties, leveraging Italy's geographic centrality and the UAE's capital to build a European AI ecosystem.

For Eni, the venture marks a critical pivot. Once a pure oil-and-gas giant, it now stakes its future on energy transition projects like this. The joint venture with Khazna—whose expertise lies in hyperscale data center design—combines decarbonized energy with cutting-edge computing, creating a replicable model for other regions.

Investment Implications: Growth and ESG Alignment

The project offers investors exposure to two high-growth sectors: AI infrastructure and sustainable energy. Key considerations include:

1. ESG Advantage: The integration of carbon capture technology makes this data center uniquely positioned to attract ESG-focused capital.
2. Scalability: The 1 GW expansion plan aligns with Europe's €200 billion AI investment pipeline under the Digital Compass initiative, ensuring long-term demand.
3. Geopolitical Tailwinds: The UAE's strategic investments in Italy's tech sector reduce reliance on U.S. or Chinese data hubs, appealing to firms seeking localized AI solutions.

Risks and Mitigants

Potential hurdles include regulatory delays in permitting carbon capture projects, fluctuating gas prices, and competition from established hubs like Amsterdam or Frankfurt. However, the project benefits from high-level political support and modular design, which allows phased execution to adapt to market conditions.

Conclusion: A Blueprint for the Digital Green Transition

Eni and Khazna's venture is more than a data center—it's a template for how energy and tech can converge to meet 21st-century demands. For investors, it represents a rare opportunity to back a project that addresses both computational and environmental imperatives. With Italy's ambition to host 2 GW of AI infrastructure by 2029, the Ferrera Erbognone campus could be the first of many such hubs.

Investment Takeaway: Consider exposure to Eni's energy transition initiatives and data center REITs like Digital Realty or Equinix, which may benefit from Europe's AI boom. Monitor regulatory approvals and scalability milestones—this project could set the pace for sustainable infrastructure in the AI era.