Mercury NZ has acquired a 12.7% stake in Datagrid NZ, the country’s first ‘AI factory’, for $53 million (US$30 million).
The state-controlled power generator and retailer says it made the investment to support long-term renewable electricity demand growth and strengthen its position “alongside one of New Zealand's most advanced, large-scale, digital infrastructure projects.”
Mercury chief executive Stew Hamilton has also been appointed as a director of Datagrid NZ as part of the investment.
“We have a deep renewable development pipeline, and long-duration demand from large electricity users like Datagrid NZ provides us with the revenue certainty that underpins our investments in new renewable generation developments,” he says.
The Singapore-based Datagrid NZ, which has secured approval to build a $3.5 billion AI (artificial intelligence) datacentre at North Makarewa, Southland, describes itself as “New Zealand’s first AI factory.”
The company is aiming to have the Southland datacentre operational by 2028, where it will support high-density IT and AI workloads.
The 360MW project holds resource consent and a final investment decision is expected to be made later this year, according to Mercury on Thursday.
Mercury’s minority stake investment in Datagrid NZ was funded from existing capital facilities and within capital management settings.
Tim Thompson, Mercury’s executive wholesale general manager, says the investment will improve Mercury’s understanding of how large-scale AI and data centre demand will develop in NZ.
“It strengthens our position for future long-term offtake, and provides us with a closer link between future customer demand and renewable generation investment. It is a staged investment with appropriate governance and downside protection,” he says.
Mercury also signed a 140MW power purchase option agreement with Datagrid in March 2026, which the gentailer says will create a pathway for the project’s renewable electricity supply.
Datagrid NZ founder and chair, Rémi Galasso, says the speed of delivery was crucial and closing this round of investment funding “allows us to move decisively.”
He described the Mercury investment as a “strategic step for us, not just an electricity supply arrangement.”
The NZ Government holds a legislated 51% controlling stake in the share market listed Mercury.
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