ALEC advances 200MW Stargate data centre

Construction of the first 200 megawatts of the Stargate Data Centre project in the UAE is advancing, according to ALEC Holdings, as structural works near completion and major mechanical and electrical installations gather pace.

ALEC, a subsidiary of the Investment Corporation of Dubai, informed the Dubai Financial Market that building structures have been erected and that mechanical, electrical and plumbing works are well under way. The update places the Stargate scheme among the most significant data centre developments currently under execution in the Gulf, reflecting the UAE’s intensifying push to expand digital infrastructure capacity in line with surging demand for cloud services, artificial intelligence applications and enterprise data storage.

The 200MW first phase signals an industrial-scale facility by regional standards. Data centres of this magnitude are typically designed to support hyperscale operators and government digital platforms, requiring high levels of redundancy, cooling capacity and energy resilience. Industry specialists note that a 200MW campus can host tens of thousands of servers, depending on configuration and power usage effectiveness targets.

ALEC has positioned itself as a key engineering and construction player in high-specification infrastructure across the Emirates. The company has delivered complex projects spanning aviation, hospitality and mixed-use developments, and has in recent years expanded its focus on mission-critical facilities. The Stargate contract underscores the strategic pivot of major contractors towards digital assets, as public and private capital increasingly flows into technology-linked real estate.

Investment Corporation of Dubai, which wholly owns ALEC, manages a portfolio spanning aviation, banking, energy, transport and property assets. Its backing provides financial depth to large-scale undertakings that align with Dubai’s broader economic diversification strategy. Data infrastructure has become central to that vision as authorities seek to consolidate the country’s position as a regional technology hub connecting Asia, Europe and Africa.

The UAE has announced successive initiatives aimed at bolstering digital capacity, including cloud adoption frameworks, artificial intelligence roadmaps and regulatory support for data localisation. Global technology groups have deepened their presence through regional cloud regions and partnerships with public entities. Microsoft, Amazon Web Services and Google Cloud have all expanded infrastructure footprints across the Emirates and neighbouring Gulf states, intensifying competition for resilient, high-capacity facilities.

Power availability remains a defining factor for projects on this scale. A 200MW facility demands substantial grid connectivity and, increasingly, integration with renewable energy sources to meet sustainability benchmarks. The UAE has invested heavily in solar generation, including large-scale plants such as the Mohammed bin Rashid Al Maktoum Solar Park in Dubai and Noor Abu Dhabi, to reduce carbon intensity and secure energy supply. Developers of hyperscale data centres are under pressure from clients and investors to demonstrate credible pathways to lower emissions and improved energy efficiency.

Market analysts estimate that Middle East data centre capacity is set to grow at double-digit rates over the coming years, driven by enterprise digitisation, 5G roll-out, fintech expansion and the rise of generative AI workloads. Artificial intelligence models require vast computing power and high-density racks, raising demand for specialised cooling systems and advanced electrical distribution networks. Contractors with experience in delivering mission-critical mechanical and electrical systems are therefore gaining prominence.

ALEC’s statement that MEP works are well under way suggests that the project has progressed beyond early civil stages into technically complex installations. Mechanical systems typically include chilled water plants, cooling towers or advanced liquid cooling arrangements, while electrical works cover substations, switchgear, uninterruptible power supplies and backup generation. These components are essential to maintaining uptime standards that hyperscale clients expect, often targeting Tier III or Tier IV certification levels under international benchmarks.

Regional competition is intensifying. Saudi Arabia has unveiled plans to attract billions of dollars in digital infrastructure investment under its Vision 2030 programme, while Qatar and Bahrain have also sought to position themselves as data hosting and cloud service centres. The UAE’s established regulatory framework, connectivity through submarine cable landings and relatively stable operating environment have given it an early advantage, though cost pressures and land availability remain considerations.

For contractors and developers, the Stargate project represents not only a construction milestone but also a signal of confidence in long-term demand. Data centre investments are typically underpinned by multi-year service agreements with cloud providers or large enterprise tenants, offering predictable revenue streams compared with traditional commercial property. However, they also carry significant upfront capital expenditure and require precise execution to avoid delays that can erode returns.