Banks fund $18b loan for Oracle-linked AI data center

About 20 banks are providing a roughly US$18 billion project finance loan to support the construction of a data center campus in Doña Ana County, New Mexico.

The campus is linked to Oracle, expected to be its tenant, and is part of the US$500 billion Stargate project spearheaded by OpenAI, SoftBank Group Corp., and Oracle.

Blue Owl Capital is providing equity, while BorderPlex Digital Assets and STACK Infrastructure are developing the facilities.

Sumitomo Mitsui Banking Corp, BNP Paribas, Goldman Sachs, and Mitsubishi UFJ Financial Group are serving as administrative agents.

The loan is priced at 2.5 percentage points over the Secured Overnight Financing Rate, with a four-year maturity and options for two one-year extensions.

Doña Ana County commissioners have also approved a US$165 billion industrial revenue bond package and a set of tax incentives.

🔗 Source: Bloomberg

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Implications, context, and why it matters.

Project Jupiter microgrid raises emissions and oversight questions

Project Jupiter is a planned data center campus in Doña Ana County. Its on-site microgrid is an independent power system that can run apart from the regional grid. The size is about one gigawatt (GW), enough to light about 100 million LED bulbs 1.
Developers say the microgrid will serve the campus without raising costs or affecting service for local residents, and it will run separate from the utility 1.
Resident Phil Simpson analyzed a smaller 700 megawatt (MW) plant and found it would emit more carbon dioxide (CO2) than all of El Paso Electric’s Texas and New Mexico system combined 1. That scale brings tough air permits and environmental review for any gas plant.
Financing uses $18 billion in project debt with four-year maturity and two one-year extension options. The timeline signals an aggressive build for the campus and its energy systems.

Meta’s El Paso deal offers a template for shielding customers

Meta’s separate El Paso data center uses a special rate at El Paso Electric 2. The investor-owned utility serves El Paso, Texas and parts of southern New Mexico. The rate recovers all dedicated infrastructure costs from Meta, and the utility must later prove to the Public Utility Commission of Texas (PUCT) that other customers are not subsidizing the project.
The campus backers plan to power the site with their own microgrid 1. It remains unsettled whether El Paso Electric will supply power or procure new resources for this load.