Hub Power Company (HUBCO) has delayed its proposed data center project because of high electricity and technology costs, significant infrastructure requirements and uncertain financial returns, according to a research note from Topline Securities that was issued after the annual general meeting of the company. The note reflects the comments that were made by the management of HUBCO at the meeting, where the company explained why it has not moved ahead with the plan. The delay shows that the company is still weighing the commercial case for the investment, and that the cost of power and technology is one of the main factors in its thinking.
HUBCO management said that the viability of the project could improve if data centers were developed in dedicated zones with access to multiple grid connections. The company also indicated a preference for entering the market at a larger scale, with a capacity of around 100 megawatts (MW), rather than starting with smaller facilities of 5 to 10 MW. These remarks highlight the infrastructure and cost challenges facing large scale data center development, where a reliable supply of electricity and substantial upfront investment are important considerations. A larger facility in a dedicated zone would address some of the concerns about grid access that the management described.
The research note also makes clear what remains unknown about the project. There is no information on a revised launch date, an estimated investment amount or the details of a final project structure. The comments of HUBCO come as the company evaluates the commercial feasibility of its proposed data center investment amid high power and technology costs and substantial infrastructure needs. For now, the company has described the conditions under which the project could become more attractive, but it has not announced a new timeline or confirmed the size of the money that it would put into the facility.
The decision of HUBCO comes at a time when several corporate players have entered the data center market of Pakistan or announced plans to invest in the sector. Quantum Global Data Centre of Gul Ahmed Energy Group has announced plans for a major data center project in partnership with Huawei Pakistan, while Sky47, which is backed by Mari Energies, has launched its artificial intelligence (AI) ready Karakoram-01 facility. Separately, Indus Cloud, Indus DC REIT and United Bank Limited have partnered to develop local data center and cloud infrastructure, which reflects growing corporate interest in the digital infrastructure market of the country.
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