Alberta released its AI Data Centre Strategy, Powering the Future of Artificial Intelligence, on December 4, 2024, with a target of $100 billion in private investment over five years. The strategy rests on three pillars: power capacity, sustainable cooling and economic growth. Its most distinctive feature is a preference for a bring-your-own-power model, in which developers supply their own generation rather than relying on the public grid.
Large projects have been announced. eStructure’s 90 MW CAL-3 facility north of Calgary in Rocky View County was announced on October 29, 2024, and the Wonder Valley AI data-centre industrial park near Grande Prairie, announced by the MD of Greenview with Kevin O’Leary on December 9, 2024, has been described as a development that could eventually attract more than $70 billion in total investment. Alongside those announcements, the province has built a levy framework for facilities of 75 MW or more.
Data centres are among the most capital-intensive assets a lender can underwrite. They combine the risk profile of a power producer, a construction project, a commercial landlord and a technology company in a single credit. For Alberta lenders, borrowers and investors, the question is not whether the sector will grow but how the capital stack should be built so that it survives cost overruns, tenant turnover and equipment cycles.
This article explains what the strategy and the levy mean for a project’s economics, then works through the elements a lender will examine: power supply agreements, construction risk, offtake and tenant quality, equipment obsolescence, and the structure of the capital stack. It closes with what Alberta borrowers should prepare before approaching a lender.
Key Takeaways
- Alberta’s strategy targets $100 billion of private data-centre investment over five years and favours a bring-your-own-power model
- The provincial levy applies to facilities of 75 MW or more and, since the March 2026 clarification, is calculated on actual grid consumption with a 0% rate for power not drawn from the grid
- Power supply arrangements are the foundation of any data-centre credit, and lenders underwrite them before they underwrite the building
- Tenant and offtake quality determines leverage, pricing and tenor far more than construction cost does
- Equipment obsolescence and construction risk require structures that separate long-lived assets from short-lived ones
The Strategy and the Levy: What Lenders Are Reading
The bring-your-own-power model reflects a practical constraint. Alberta’s grid cannot absorb an unlimited number of facilities drawing tens or hundreds of megawatts each, so the province has favoured developments that arrive with their own generation, most often natural-gas-fired, located behind the fence. That aligns the sector with Alberta’s gas resource and its existing energy service industry, and it means a data-centre developer is also, in effect, a power developer.
The levy framework for facilities of 75 MW or more was enacted on December 9, 2025 through the Financial Statutes Amendment Act. An amendment on March 26, 2026 clarified that the levy is based on actual consumption of public grid electricity, and that power not drawn from the grid is eligible for a 0% rate. The policy signal is unambiguous: self-supply is rewarded, grid dependence is charged. A lender modelling a project’s operating costs now has to model its grid draw, not just its nameplate capacity.
The energy backdrop adds a layer of sensitivity. Since the Strait of Hormuz closure in March, oil prices have remained elevated, with Brent around US$96 to US$98 in early June. For a project whose generation runs on natural gas, fuel supply and price are operating variables that belong in every downside case. Interest rates, by contrast, have been steady: the Bank of Canada held its policy rate at 2.25% on June 10, with the next announcement scheduled for July 29.
Power Supply Agreements: The First Credit Question
Before a lender looks at a building, it looks at the electrons. A grid-connected project needs an interconnection agreement and a power purchase arrangement with a term that matches or exceeds the debt. A self-supplied project needs generation equipment, a fuel supply contract, environmental and utility approvals, and an operator capable of running a power plant to the reliability standard a data-centre tenant expects.
Lender diligence on power focuses on counterparty quality, contract term, curtailment and interruption provisions, permitting status and the cost of fuel. Where generation is on site, lenders will want an independent engineer’s review of the equipment, the maintenance regime and the redundancy built into the design. The bring-your-own-power model gives the developer control, but it also transfers to the developer, and therefore to the lender, the risks that a utility would otherwise carry.
For Alberta, this creates an opening for the province’s existing energy sector. Gas producers, midstream operators and power developers can become partners in data-centre projects, supplying fuel or generation under long-term contracts. Those contracts, when properly structured, convert an uncertain merchant exposure into a bankable revenue stream for the energy partner and a bankable cost for the data-centre operator.
Construction Risk and the Path to Completion
Construction is where most project-finance losses originate, and data centres are no exception. Lenders will expect a fixed-price or guaranteed-maximum-price construction contract with an experienced contractor, liquidated damages for delay, a realistic contingency and a completion guarantee or equity commitment from the sponsor. Cost pressure is real: U.S. Section 232 tariffs on steel, aluminum and copper ranged from 10 to 50% on full value as of April 6, 2026, and Canada maintains counter-tariffs on U.S. steel and aluminum, so structural and electrical inputs cost more than they did two years ago.
Structure follows from those risks. Lenders typically require equity to be funded first, cost-overrun facilities to be committed, and an independent engineer to certify progress before each draw. Long-lead items such as transformers, switchgear and generation equipment should be procured early and their delivery risk allocated clearly.
Offtake and Tenant Quality
Hyperscale and enterprise tenants
The strongest data-centre credits are those with long-term leases or capacity agreements from investment-grade tenants. Lenders will lend against contracted cash flow, and the tenant’s credit rating, lease term, renewal options and termination rights determine how much debt the project can carry and at what price. A single-tenant facility leased for a term longer than the loan is, from a lender’s perspective, closer to a credit-tenant lease than to a speculative development.
Speculative and multi-tenant builds
Facilities built without committed tenants, or leased to many smaller users on short terms, carry more risk and attract less leverage. Lenders will look for pre-leasing thresholds before funding, require higher equity contributions, shorten tenor and price the debt accordingly. For Alberta developers targeting regional enterprise demand, the trade-off is flexibility and potentially higher rents against a more expensive and conditional capital stack.
AI compute and the shape of demand
Demand for AI computing capacity has driven the current wave of announcements, but it is also the least predictable element. Contract lengths for AI workloads may be shorter than the useful life of the building, and revenue tied to the pricing of compute is more volatile than revenue tied to space and power. Lenders are likely to underwrite a project on the durable components, space, power and cooling, and treat compute-linked upside as equity return rather than debt capacity.
Equipment Obsolescence and Structuring the Capital Stack
A data centre is two assets with different lives. The shell, power infrastructure and cooling systems are long-lived and can support long-term debt. The servers and accelerators inside are short-lived, refreshed on cycles measured in a few years, and are often owned by the tenant rather than the landlord. Financing structures should respect that division, with senior debt sized to the long-lived assets and equipment financed separately through leases or tenant capital.
The capital stack for an Alberta project typically combines a senior construction-to-term facility, a mezzanine or subordinated layer, and sponsor equity. Canadian banks, ATB Financial and credit unions are natural senior lenders, and private credit has become a meaningful participant in Canadian mid-market and project finance. Where a project involves an Indigenous equity partner, the Alberta Indigenous Opportunities Corporation’s loan-guarantee program, which covers telecommunications and, since spring 2025, technology, may support the community’s participation with guarantees of $20 million to $250 million per project.
The levy should be modelled explicitly at every layer. A project designed around self-supply with a 0% levy rate on power not drawn from the grid has a fundamentally different cost profile from one that leans on the public grid, and lenders will test what happens if generation is unavailable and grid draw rises. Refinancing risk at the end of the construction-to-term period is the other structural question, and it turns on tenant quality more than on anything else.
What Alberta Borrowers Should Prepare
A borrower approaching a lender should arrive with the power arrangement substantially settled, a construction contract and budget reviewed by an independent engineer, a tenant or offtake strategy with named counterparties, and a financial model that runs the levy, fuel price, interest rate and vacancy cases.
The regional opportunity extends beyond the developers themselves. Contractors, electrical and mechanical trades, gas suppliers, equipment dealers and service businesses in Rocky View County, the Grande Prairie region and elsewhere will see demand from these projects. A service company whose growth depends on a single data-centre project should structure its own credit with that concentration in mind.
At Pragma Capital, we see Alberta’s data-centre strategy as a rare combination of policy clarity and resource fit. The lender’s job is to make sure that clarity translates into structures that survive the inevitable surprises. Borrowers, investors and partners should work with their financial, legal and engineering advisors to build those structures before the first shovel goes into the ground.