Meta announces strategic venture with BlackRock to develop Northeast El Paso data center
EL PASO, Texas (KVIA) -- Tuesday, Meta announced a venture to finance the development of a data center under construction in Northeast El Paso. According to a news release, the venture involves BlackRock, an asset management company.
The news release said Meta spent more than 15 years developing, constructing and operating data centers. It said BlackRock (with Global Infrastructure Partners and HPS Investment Partners as part of it) compliments Metas strategy.
As part of the project structure and financing, Meta will enter lease agreements with the venture for use of the entire data center campus. It said the leases have a four-year initial term with four options to expand, providing Meta flexibility over a possible 20-year term.
Meta also will provide residual value guarantees (RVG), which have an aggregate threshold of $13 billion that decreases over time, the company said. If certain conditions are met within the first 16 years of the lease term, Meta's maximum RVG payment would equal any shortfall between the fair value at the time and the RVG threshold for the covered property.
"The parties have committed to fund their respective pro rata share of the approximately $14 billion in total development costs for the buildings and long-lived power, cooling, and connectivity infrastructure at the campus," Meta said.
At financial close, Meta will contribute the venture land and construction-in-progress assets will be valued at $2.3 billion.
BlackRock will make a cash contribution of $4.9 billion, Meta said.
Additionally, as part of the 80/20 split, Meta will get a one-time distribution of $1 billion to align ownership stakes, the company said.
According to the news release, funds managed by BlackRock will own an 80% interest in the venture while Meta will keep the remaining 20 percent. A $12.5 billion debt financing will fund a part of BlackRock's investment.
"Building the infrastructure for superintelligence is key to making sure the benefits of this technology are distributed to everyone," said Mark Zuckerberg, Meta founder and CEO in a statement. "Our partnership with Larry and the team at BlackRock allows us to move faster and at greater scale -- pairing our deep expertise in designing and operating world-class data centers with one of the world's leading infrastructure investors."
BlackRock CEO Larry Fink said, "We're excited to partner with Mark and the Meta leadership team on the El Paso data center campus, which will create thousands of skilled jobs and help drive economic growth in the local community,"
Meta said the data center, which is currently under construction, will have 1 gigawatt of compute capacity.
Meta will provide construction management, administrative and property management services for the campus. It also said it will be the initial sole occupant of the data center until it's complete.
The transaction is expect to close in the coming days, and the venture is expected to begin bringing the capacity online in 2028.
Meta said the data center in El Paso has an investment of more than $10 billion from the company, which supports 4,000 construction jobs and 300 operational jobs once it's complete. It said 2,300 workers are onsite now.
