The Pelagos data centre promises investment on a scale Gibraltar rarely sees. Opposition is growing here and abroad, so the debate now needs to move beyond whether data centres are simply good or bad and focus more clearly on what Gibraltar’s businesses (and wider community) would gain in return.

There is no shortage of big numbers attached to the Pelagos proposal. The project is being presented as a 250MW facility on a 20,000 square metre site at the North Mole, with around 500 construction jobs and 100 permanent positions once operational. When it was first announced, the projected investment was put at approximately £1.8bn, although Government referred to it this week as £1.5bn. Pelagos has described it as the biggest foreign direct investment in Gibraltar’s history.

For an economy our size, that deserves serious consideration, but so does the opposition that has built around it. More than 2,200 people have signed a petition against the scheme, environmental groups have raised questions about energy, cooling, marine ecology, noise and land use, and around 400 people joined a wider protest last weekend in which the data centre featured prominently. The GSD has now said it would stop the project if elected.

The debate is getting bigger

What is happening here reflects a broader shift in sentiment around major data-centre developments internationally. As the AI boom drives demand for computing power, host communities are becoming more vocal about the amount of energy, water, land and infrastructure these facilities require.

Recent protests across parts of Europe have called for tighter controls on large-scale developments, including demonstrations in Spain, while governments elsewhere are reviewing planning and utility frameworks to ensure that local communities are not left carrying infrastructure costs created by rapid data-centre expansion.

In Australia, a parliamentary inquiry recently concluded that existing processes were not doing enough to assess the cumulative pressure of new data centres on electricity, water and infrastructure. Utilities in parts of the United States are also introducing bespoke arrangements for major data-centre customers so that the cost of new infrastructure does not simply fall on existing consumers.

None of this makes data centres inherently bad investments. It does show that the questions being asked in Gibraltar are increasingly familiar elsewhere too, and that investors are being expected to make a much clearer case for the wider value their projects bring.

What Pelagos says

Pelagos has started answering some of the concerns raised locally. The company says the proposed facility would not draw electricity from Gibraltar’s existing grid and would ultimately run on renewable energy, with on-site back-up generation.

It says its main cooling system would use a closed loop, reusing the same liquid rather than continuously consuming water, with supplementary cooling only during prolonged high temperatures. Pelagos has also said that noise-producing equipment would be contained within the building envelope and that affected Mediterranean ribbed limpets would be relocated and monitored by ecological specialists.

Those are important assurances, but they now need to stand up to detailed planning and environmental scrutiny. The Nautilus Project remains opposed, particularly over the potential impact of heat on the Bay, while Pelagos argues that its design will avoid the consequences critics fear.

Planning documents, environmental studies and independent scrutiny should give Gibraltar a clearer basis on which to assess those competing positions.

What does Gibraltar get?

A £1.8bn investment sounds transformational, but that headline figure is the capital being deployed into the project, not a direct measure of the value that would stay in Gibraltar. Businesses and the wider public will want to understand how that investment translates into permanent jobs, local contracts, tax revenue and new skills.

One hundred permanent positions would be welcome, particularly if they create technical career paths that do not currently exist locally. Pelagos has said it is exploring training opportunities for young Gibraltarians, but there is still plenty to understand about how many roles are likely to be filled locally, what qualifications they will require, and how much work Gibraltar companies could realistically win during construction and once the facility is operational.

There is also the question of what a development of this scale could contribute to the wider economy around it. Professional services, maintenance, security, technology, training and other specialist suppliers could potentially benefit, but those opportunities need to be quantified rather than assumed.

The value of the land

Twenty thousand square metres at the North Mole is a major commitment in a place where every sizeable site has competing uses. The comparison is therefore not simply between a £1.8bn data centre and doing nothing. It is between this project and whatever other economic, infrastructure or public uses the site could support over the same period.

Government has itself acknowledged that Gibraltar’s limited public land needs to be used responsibly and for the overall benefit of the community. That makes the economic return from the site, over decades rather than just during construction, an important part of the assessment.

The government has agreed to meet protest organisers and respond directly to their concerns, while Pelagos says it intends to publish planning documents and provide further information. That creates an opportunity to move the debate into more useful territory.

Gibraltar should remain ambitious about attracting international investment, especially investment that can diversify the economy and create new sectors. Investors proposing projects of this scale should also be expected to demonstrate the local dividend in clear terms.

That means explaining how many jobs will be created, what tax contributions are expected, what opportunities will exist for local suppliers, what infrastructure the project will require, and what its environmental footprint will look like in practice.

These are increasingly the questions being asked of data centres internationally. If the Pelagos case is as strong as its supporters believe, answering them clearly should strengthen the argument for the project rather than weaken it.