Portugal Data Centre Boom Could Add €3.7B by 2031

Portugal’s digital infrastructure is scaling up at a pace few foresaw even five years ago. A new market survey predicts that the nation’s fast-growing data-centre industry could inject €3.7 B into economic output by 2031, create thousands of skilled jobs and, if handled carefully, strengthen Portugal’s role as a strategic Atlantic hub for the world’s cloud traffic. Yet the same forecast warns that electricity and talent shortages may clip those ambitions unless policy keeps up.

A Quiet Digital Boom Gathers Speed

The study, commissioned by industry group Portugal DC and analysts Pb7 Research, says the sector’s contribution to GDP is on track to jump from €160 M in 2024 to €3.7 B within six years—a 23-fold rise that would outpace tourism’s average annual growth rate. Roughly 9 400 full-time positions could be sustained across engineering, construction and facility operations. Sines, once best known for its container port and oil terminal, is emerging as the poster child of this boom, but Lisbon’s “data-belt” and interior towns such as Abrantes are also in line for investment.

Billions Flowing South: The Investment Map

Flagship projects help explain the headline numbers. Start Campus, an American-backed complex in Sines, expects to reach 1.2 GW of installed IT power—on par with a medium-sized European city—and could mobilise €30 B once customer hardware is counted. Equinix is doubling its Lisbon footprint, while Microsoft has booked capacity with Nscale inside Start Campus to serve artificial-intelligence workloads from early 2026. Further north, a €7 B facility in Abrantes branded EDC One is slated for 2028. Smaller but strategic builds by AtlasEdge, Merlin Properties, Voltekko and OVHcloud round out a list that pushes committed capital above €13 B by decade-end.

Why Multinationals Are Choosing Portugal

Several location advantages are converging. First, Portugal sits at the landing point of at least six new subsea cables—EllaLink, Equiano, 2Africa, Nuvem, Medusa and PISCES—providing low-latency routes to Africa, the Americas and Mediterranean markets. Second, renewables already cover 87.5 % of national generation, allowing operators to sign long-term green-power PPAs and advertise near-zero-carbon hosting. Third, land prices outside Lisbon remain modest by Western European standards, making hyperscale plots viable where Amsterdam or Frankfurt would be cost-prohibitive. Finally, political stability and the euro currency reduce perceived risk for US and Asian investors.

Green Power and Grid Stress: The Energy Question

Success brings headaches. Industry models suggest data centres could draw 8.5 TWh of electricity a year by 2031—equivalent to the consumption of every household in Porto and Braga combined. Cooling systems will also demand fresh water at a time when drought alerts are becoming common south of the Tagus. Grid operator REN has flagged the need for rapid-fire substation upgrades along the Alentejo coast, while environmental regulators insist on heat-reuse schemes and seawater cooling loops. The sector, for its part, has pledged to reach carbon neutrality by 2045, five years ahead of the EU mandate.

Talent Hunt and the Classroom Challenge

Money alone cannot buy specialised staff. Portugal produced just 6 500 new STEM graduates last year, far fewer than projected demand. Recruiters already tap Brazil, Spain and Eastern Europe for electrical engineers, HVAC technicians and cybersecurity analysts. To narrow the gap, Lisbon is expanding digital-skills vouchers, and universities in Évora and Aveiro are spinning up micro-degrees in data-centre operations. Without a broader pipeline, companies warn of salary inflation that could erode Portugal’s current cost advantage.

What Comes Next: Policy on the Drafting Table

Government officials are finalising a National Data-Centre Strategy that will weave together grid investment, expedited permits for projects classified as Projecto de Interesse Nacional and targeted tax credits tied to energy efficiency. Under the Recovery and Resilience Plan (PRR), nearly €5 B is earmarked for digital and green infrastructure, some of which could subsidise the next wave of fibre rings and solar farms. Brussels is also turning the screws: from 2026 every European data centre above 500 kW must report public energy-efficiency metrics, a transparency rule Portuguese operators welcome as a branding edge.