How a USD 2.15 bn data center could put Egypt in the AI export business

Alexandria may soon be home to a green AI data center built purely to export compute. Income Egypt for Infrastructure & Investment and Sustainable Infra Capital (SIC), a Dubai-based platform backed by Saudi and South Korean capital, are developing Project Atlas, a campus in New Borg El Arab whose 180-MW first phase targets European AI demand, according to a press release (pdf). Phase 1 would cost around USD 2.15 bn, Income Head of Strategy and Head of Digital Infrastructure Aly Sheta tells EnterpriseAM.

The consortium is targeting financial close by end-2027, with a first phase ready for service in 4Q 2028. The sponsors unveiled the project late last month at Cushman & Wakefield’s London headquarters, where the firm, which is also advising on Atlas, released a white paper (pdf) on Mediterranean data centers that uses Atlas as its Egypt case study.

The USD 2.15 bn covers the campus alone and excludes the equipment inside it. The figure includes the solar park, the core and shell, supporting infrastructure, and the building’s mechanical and electrical systems (MEP works), or “everything that essentially builds the campus itself,” Sheta tells us, adding that the estimate is high-level and will firm up closer to financial close. The servers, racks, and chips fall to tenants, who typically spend three to four times the cost of the core and shell. “Our scope ends at the shell and the MEP works,” he says.

Compute follows power

Cushman & Wakefield’s white paper lays out the case for Atlas, starting with Europe’s shortage. Demand for AI computing is here, yet the continent has struggled to build enough of it, largely because of long waits to connect to aging grids. The firm expects Southern Europe’s data center capacity to grow tenfold, from 800 MW to 8 GW, which it says will mean severe competition for grid connections and land. A site that has to wait five years for a grid connection is less competitive than an emerging market that can deliver capacity sooner, according to the firm.

Some of that demand could spill across the Mediterranean, much as Malaysia’s Johor became a “release valve” for Singapore. The firm argues that southern Mediterranean markets “should not be viewed simply as domestic data center markets,” since they can host European workloads that don’t need to run inside Europe’s cities.

The paper places Egypt at the eastern end of that corridor and points to three advantages — scale, connectivity, and geography. On scale, Egypt has North Africa’s largest grid, with around 60 GW of installed capacity against a record peak load of 40.2 GW in August. Its neighbors have far less room. Morocco runs a system of around 12 GW, where consumption is growing faster than generation, while Tunisia, with peak demand of around 5 GW, saw rolling power cuts during this summer’s heatwave.

On connectivity, Egypt has 15 operational subsea cables in the Mediterranean and two more planned, against five for Tunisia and one for Morocco. Yet the firm tracks just 13.5 MW of operating data center capacity in Egypt, or 0.1 MW per mn people, the lowest ratio in its benchmark. That’s why the paper sizes up northern Egypt by how much foreign demand it can accommodate, starting with workloads that can’t find capacity in Southern Europe and the Eastern Mediterranean and potentially extending to East Africa, the Middle East, and Asia.

Income is pitching Atlas as exactly that kind of project. The press release says the campus addresses Europe’s three bottlenecks of power, land, and permits, and its permits are already in hand. Atlas will use Egypt’s subsea cables to carry AI workloads to and from Europe at low latency, running its own dedicated fiber linking the campus to the cable landing station, the release adds. The paper’s argument on grid headroom also skips gas supply, which by our reading is the tighter limit, as the state cuts gas to fertilizer and steel plants this month.

SOUND SMART- Data takes 34-37 milliseconds to make a round trip from Egypt to Marseille and about 37 ms to Frankfurt, according to Cushman & Wakefield, against 21-23 ms from Morocco and 12-14 ms from Tunisia to Marseille. That makes Egypt a “poor” fit for highly latency-sensitive work such as gaming or high-frequency trading, and a strong one for work that can tolerate the delay, such as fine-tuning, synthetic-data generation, and batch inference. Atlas is pitched at that second group, from model training to large-scale inference, according to the release.

Bigger than the whole market

To put 180 MW into perspective, estimates of how much data center capacity Egypt has installed range from 15 MW to 60 MW, with Sheta putting it at around 29 MW. But it’s a sector that is attracting interest from nimble players including Hassan Allam Utilities and A15 (which together committed USD 400 mn to the first phase of a new data center in June). Gulf Data Hub and Elsewedy are backing a USD 2.1 bn plan for up to 192 MW of compute.

Atlas and its sponsors are in talks with hyperscale and AI customers, including hyperscalers such as AWS, Microsoft, and Meta, which Sheta says opened in Kenya, Morocco, Nigeria, and South Africa instead of Egypt. Atlas has been on the drawing board since January 2024, when Income, Record Digital Asset Ventures, and SIC — then called Swicorp Infra Capital — signed an MoU with the Communications Ministry. Record Digital has since left the consortium.

The cost of going greener

The data center itself will take up just 160k sqm of the project’s 5.4 mn sqm site, on a plot that Income has bought outright and will run as a private service freezone, Aly Sheta tells us. Income holds the rest of the land under a usufruct arrangement and will build the solar plant there to feed power straight to the campus without a grid connection of its own. At full build-out, the plant could reach 485 MW at peak output, while phase one will need more than 200 MW of solar to cover its planned 40% share of the power mix, Sheta says.

Sheta says the 40% share could climb, at a price. “We have the ability to actually scale it up to 60, 70%, but that entails you scaling up your BESS as well,” Sheta says, referring to the battery energy storage system. “That could mean you have more of a green component, but also it means that you could have a higher LCOE, so your landed cost of electricity could increase, but you’d essentially be more green,” he adds.

The final solar share, battery size, and campus design will all be settled with the technical partner, which is yet to be appointed. For now, Sheta expects a battery system of around 800 MWh, potentially slightly more or less. Cooling will run on a closed loop, which he says limits water use to the initial fill and minor top-ups from the local utility. The consortium is ready to revise the preliminary design that UK-based Future-Tech drew up, which uses direct-to-chip liquid cooling. “We always knew that the incoming technical partner or operator is going to have his own specs,” Sheta tells us. “But we just wanted to go to the market with something.”

Atlas is also negotiating a 220 MW power purchase agreement with the grid. “We’re essentially willing to pay hard currency to the country, and at a significantly higher rate than the industrial norm,” Sheta tells us, declining to give the tariff beyond saying that it would be well above what large industrial consumers such as Ezz Steel and Egypt Aluminium pay.

Sheta sees grid supply as essential however large the solar plant grows. “Renewable power will never be enough,” he says. “Even if you scale up your BESS to a ludicrous figure, you can easily be faced with three, four days of overcast, cloudy days, and suddenly you’re cornered.”

Tenants first, then debt

The consortium is looking to finance around 70% of the project through non-recourse debt, with sponsors putting up the remaining 30%. The debt has yet to be committed, although development finance institutions have shown interest. “We’ve had preliminary discussions with IFC, EBRD, and all of them have expressed a lot of interest,” Sheta tells us.

That interest only turns into money once tenants sign, and none have so far. “That typically entails securing long-term binding offtake agreements. I think that’s the crucial element to securing the level of finance that we’re looking for,” Sheta says of reaching financial close.

Finding tenants will largely fall to a technical partner that the consortium is still recruiting. Cushman & Wakefield has spent around six months running that search and has opened preliminary talks with Equinix and Digital Realty, Sheta tells us. That partner would handle day-to-day operations and would typically bring its own customers, he adds, though Egyptian buyers need US Commerce Department approval for Nvidia hardware, and it isn’t yet clear whether they would get the highest-end parts.

Offshore island, onshore rules

Atlas’s business model depends on being walled off from Egypt, with Sheta describing the goal as becoming “a digital embassy or an offshore island” that holds no Egyptian data and connects to no Egyptian network. He says that isolation is what makes Atlas compliant with the EU’s data protection rules. “Once we were completely isolated from Egyptian networks, we realized that that actually enables us to become GDPR-compliant, which essentially allows us to process and store European data here in Egypt,” Sheta tells us. “Something that’s very difficult to do.”

A Magic Circle law firm, which he declined to name, has signed off on that setup, Sheta says, while the campus’s agreement with Telecom Egypt bars it from storing any local data. Because no local data is stored on site, he adds, the campus falls outside the scope of local audits. “You need to ensure that there’s going to be no sort of meddling or auditing when it comes to the workloads being transported to the campus,” he tells us.

That sign-off covers whether Atlas meets European rules, and it leaves open whether Egyptian law will guarantee the isolation Atlas is promising. Egypt’s wider legal framework was written with telecom operators in mind, leaving hyperscalers asking for clearer rules before they build, according to the lawyers and investors whom our AI + Innovation team interviewed about the sector. Under the 2020 data protection law, which Egypt began fully enforcing earlier this month, each transfer of data abroad “needs its own permit, granted case by case,” says Soliman, Hashish & Partners Managing Partner Mohamed Hashish.

Investors are also asking for “a judge’s approval for any government access to data,” says Clyde & Co Partner Sameh Dahroug. They also want “a fixed fee they can plan around” in place of the share of revenue that data centers now pay, as telecom companies do, he adds. Formal data embassies, which would place a facility’s data under a foreign jurisdiction, look unlikely because they would probably require a constitutional amendment, according to Dahroug and Al Tamimi & Company’s Ayman Nour.

The government is working on both the rules and the projects, with a national data center strategy due before year-end. Communications Minister Raafat Hindy is also targeting five to seven large-scale facilities over the next four to five years, some of them exporting services by 2030. Sheta says officials have backed Atlas since its early days. “We were pleasantly surprised by the willingness to support,” he tells us, crediting the Communications Ministry and the Housing Ministry’s New Urban Communities Authority for championing the project.

Built for Europe by design

The export-only model came from Income’s board, which was looking for businesses that could generate hard currency. The domestic market couldn’t fill a campus this size anyway, as an early study that Income ran with CBRE found Egyptian demand nowhere near what Atlas would need. “You’re talking about things that really require a heavy, heavy amount of data processing. And you just don’t have the demand coming from Egypt yet,” Sheta says.

Cushman & Wakefield concludes that northern Egypt’s role is to serve as “a regional AI factory, rather than a conventional data center market.” That means complementing Milan, Marseille, and Frankfurt for workloads where power, scale, and cost per token, the cost of each unit of AI output, matter more than the final tens of milliseconds of latency. If developers can deploy 100+ MW of GPU capacity in Egypt faster or more cheaply than in an established European hub, a 30-50 ms network delay “can be entirely acceptable for a substantial class of inference workloads,” the firm writes.

To capture that demand, frontier markets need to deliver what the paper calls a “shopping list.” It runs from retail power below USD 0.10 per kWh and power that can be added “in months rather than years” to a robust GDPR-based sovereignty framework, carrier-neutral fiber, and governments that welcome the sector. The final item, “perhaps most importantly,” is early engagement with offtakers, the long-term tenants who would rent the capacity.