The Canada Pension Plan Investment Board is providing $225-million toward a construction loan to expand a data centre in Cambridge, Ont., where Canadian artificial-intelligence company Cohere Inc. is a customer.
The expansion of the existing data centre will add 54 megawatts of hyperscale capacity to a facility that previously generated only about six megawatts – giving it the kind of heavy-duty power that caters to companies training new, sophisticated AI models. That is enough energy to power tens of thousands of homes.
The CPPIB investment will give it a 50-per-cent stake in a $450-million construction loan provided by lead lender Deutsche Bank AG, which is providing the rest of the loan through its private credit and infrastructure division.
The expansion is a joint venture between U.S.-based data centre developers Related Digital and Ascent as well as investment manager TowerBrook Capital Partners, which has offices in New York and London.
The Globe and Mail previously reported that U.S. company CoreWeave Inc. will operate the new facility, with Cohere as a customer.
The site was originally a food distribution centre that BlackBerry Ltd. converted into a data centre more than a decade ago. The first phase of the expanded facility is coming online now, with two further phases expected to be completed by the summer of 2026.
The enlarged facility “is a great example for us where we can invest on our home soil, in scale, in a space that really matters not just here in Canada, but really globally,” Geoffrey Souter, CPPIB’s head of real assets credit, said in an interview.
“But I think it’s really just the tipping point of what’s to come,” he later added.
The booming demand for data centres has been an attractive investment opportunity for large pension funds and other major institutional investors.
Canada has limited inventory and its data centre market is “very fragmented,” Mr. Souter said. But with increased demand for data sovereignty, a strong pool of talent and good fibre networks, “we’ve got a lot of things that are really supporting growth,” he said.
The CPPIB manages $714-billion for the Canada Pension Plan and its 22 million plan members. Credit accounts for 11 per cent of the fund, and one-fifth of that – roughly $15-billion – is in bespoke loans to borrowers in real estate, infrastructure and sustainable energy.
The CPPIB has invested about $1-billion into digital infrastructure in Canada in the past 12 months, some of it as part of a consortium led by U.S-based Blackstone Inc. that bought a $7-billion minority stake in Rogers Communications Inc.’s wireless infrastructure.
The CPPIB has data centre joint ventures and investments in Canada and the U.S., South America, Australia, Europe. Last fall, it formed a partnership to raise US$15-billion with data centre owner Equinix Inc. to buy land and build new facilities in the United States.
Earlier this week, Montreal-based eStruxture Data Centers raised $750-million for a novel data-centre securitization, and replaced a separate bank loan facility to boost its borrowing capacity to $1.35-billion.
The federal government has made it a priority to build out AI infrastructure, and pledged to spend $2-billion to support the industry last year.
Ottawa also said in December that it planned to provide $15-billion to attract additional investment from Canadian pension funds to build AI-focused data centres in Canada.
Looking ahead, the demand for exponentially greater computing power to support AI is expected to be so large that CPPIB anticipates strong growth for the market for at least the next five years.
“The private demand, the private capital is there with or without the government,” Mr. Souter said.