Spanish energy firm Iberdrola is reportedly seeking an electricity-for-equity deal for its planned data center projects.

Citing people with knowledge of the matter, Bloomberg reports Iberdrola SA plans to provide a planned Spanish data center with a grid connection and renewable power in exchange for up to 20 percent of the facility, which will cost as much as €2 billion ($2.2bn) to build.

The energy firm is said to be in advanced talks with developers to provide land connected to the grid for the joint venture, but no cash, while its partner would make the investment to build the center and operate it.

The project would reportedly rely on pumped-storage hydropower, with the possibility of adding a solar plant in the future.

The electricity-for-equity structure is reportedly a way for the energy firm to enter the data center market without major capital investment amid a time of capacity shortages in many major markets.

The joint venture is expected to be set up in the first half of 2025 and would initially focus on Bilbao-based Iberdrola’s home market, before expanding into other markets.

Iberdrola is one of the largest suppliers of renewable energy globally. It has Power Purchase Agreements (PPAs) with the likes of Amazon, Meta, Vodafone, and O2 Telefónica.

Reports that Iberdrola was looking to move into the data center space surfaced earlier this year, with the company said to be looking to form a joint venture that would provide 200MW of data center capacity in Spain by 2030. Its long-term goal is a data center empire boasting 1.2GW of capacity.

The utility has since created a new unit, named CPD4Green, to manage the development of the new business.