🧠 Food for thought

Implications, context, and why it matters.

The El Paso data center brings costs beyond jobs

• The project promises jobs, though it also needs a new 366-megawatt natural gas power plant to meet the data center’s electricity demand, according to El Paso Electric filings 1.
• Meta would cover El Paso Electric’s power delivery costs during an initial one-to-five-year bridge period. After that, the utility wants to move the plant’s costs into customer rates, if the Public Utility Commission of Texas approves the plan 1.
• The site also carries public subsidies, including an 80% city property tax rebate under a Chapter 380 agreement, a Texas economic development incentive program. City and county incentives could reach about US$550 million across all phases 2.
• At full buildout, the data center could use up to 2.5 million gallons of water per day. The city says that matches the water use of about 12,375 homes 2.

Meta’s financing setup keeps billions in AI buildout spending off its balance sheet debt

• Meta is putting together a roughly US$13 billion financing package for the El Paso, Texas data center. Most of the money is expected to come from debt led by Morgan Stanley and JPMorgan Chase, with the rest expected as equity.
• In a separate deal, Meta set up a joint venture for its Hyperion data center campus in Richland Parish, Louisiana. Funds managed by Blue Owl Capital, an investment firm, hold an 80% stake and Meta keeps 20% 3.
• Meta entered operating lease agreements with the joint venture to use the campus after construction ends. The initial term is four years, with options to extend 3.
• Meta also gave the joint venture a residual value guarantee for the first 16 years of operations. That could require a capped cash payment if certain conditions are met after a lease ends or is terminated 3.