The New South Wales government has moved 15 data centre projects worth a combined USD 35.85 billion into its Investment Delivery Authority (IDA) pipeline, marking the first round of endorsements through the state's new assessment process. The announcement signals both strong investor demand and a more selective approach to digital infrastructure development in NSW.

The projects highlight the scale of private sector interest in NSW's data centre market while reflecting a shift towards closer government oversight of energy, water, and infrastructure impacts. The state currently has around 90 data centre facilities already in operation, with investment in the sector growing at an average rate of 65 percent annually over the past three years.

Investment Scale and Economic Impact

Data centre investment now accounts for approximately 12 percent of all non-residential building activity in NSW. Treasurer Daniel Mookhey emphasized that while the scale of endorsed projects demonstrates strong confidence in the state, growth must be managed carefully.

"New South Wales is a premium destination for data centres, but we are only interested in working with proponents who have a long-term commitment to both this state and their social licence," Mookhey said.

The IDA process filtered out a significant portion of proposed developments, with around USD 28.11 billion worth of data centre and technology proposals not endorsed after being assessed as premature or overly speculative. This outcome suggests the state is taking a more curated approach to large-scale digital infrastructure rather than allowing unrestricted pipeline growth.

Approved Project Locations and Developers

The 15 projects progressing through the IDA span multiple locations across Greater Sydney, with a strong concentration in Western Sydney, reinforcing its position as the state's primary data centre corridor.

Approved developments include AIMS Capital Management's Bella Vista Data Centre Campus in Hills Shire and the Lane Cove Data Centre Development Project led by Lane Cove DC Alliance at Mars Road in Lane Cove West. Goodman Property Services received approval for Project Atlas in Blacktown.

Additional projects include GreenSquare DC's SYD1 Stage 2 in Hills Shire, KNBDC SYD4's Mamre Road Data Centre Campus in Penrith, and Lehr Consultants International's Glendenning Road Data Centre in Blacktown. Microsoft's Honeman Close Data Centre, also in Blacktown, was among the endorsed projects.

NextDC secured approval for three projects: the S7 Data Centre in Eastern Creek in Blacktown, the S4 Data Centre in Fairfield, and the S5 Data Centre and Innovation Hub in the City of Ryde.

Stockland received endorsement for three separate projects through the process. These include developments at 78 Lockwood Road Data Centre in Penrith through Stack Infrastructure, a project at 2 Davis Road in Wetherill Park in Fairfield, Stockland Fife's Kemps Creek project in Penrith, and another Stockland-led "Project A" in the City of Ryde.

One additional project has been endorsed but not publicly disclosed due to commercial sensitivities.

Industry Response and Policy Framework

A Stockland spokesperson welcomed the outcome, stating the company was pleased to have three data centre projects selected by the Investment Delivery Authority. The spokesperson noted that a state-led mechanism such as the IDA presents a significant opportunity for Stockland to leverage its operating footprint and scale its portfolio of data centres in NSW through a coordinated approach to planning and infrastructure delivery.

"By supporting large-scale data centre developments, the IDA is addressing key barriers to private sector investment while supporting innovation, job creation and long-term productivity growth across the NSW economy," the spokesperson said. "Stockland looks forward to working closely with the NSW Government to deliver critical digital infrastructure and realise major data storage investment across the Greater Sydney region."

Guy Danskine, managing director of Equinix Australia, said the announcement reflected both the scale of demand for digital infrastructure and the importance of getting policy settings right. He described fast-tracking high-quality, investment-ready projects as a positive step that brings greater certainty to the market and helps ensure Australia remains competitive in the global race for AI and digital infrastructure.

"At the same time, Equinix supports a balanced approach to energy and infrastructure," Danskine said. "Data centres already fund their own grid connections and are increasingly investing in new renewable energy capacity to support sustainable growth. The opportunity now is to align policy, planning and investment so that digital infrastructure can grow alongside the energy transition."

Infrastructure Planning and Energy Considerations

The announcement coincides with the release of the NSW Data Centre Consultation Paper, which is intended to guide how future projects are assessed and integrated into the state's infrastructure system. The consultation focuses on managing the impacts of rapid growth, particularly in relation to electricity demand, water use, and community considerations.

Minister for Planning and Public Spaces Paul Scully said data centres play an important role in jobs, data sovereignty, and the broader digital economy, but noted that planning settings must align with infrastructure capacity and environmental priorities.

Earlier this month, the IDA also endorsed 14 energy projects worth USD 23.48 billion, which are expected to support the NSW Electricity Roadmap and help accommodate rising demand from sectors such as data centres.

Danskine emphasized that consistency between state and federal frameworks, alongside faster and more predictable approvals, will be critical. He noted that with the right settings, data centres can continue to underpin Australia's digital economy while contributing to long-term energy resilience and national capability.

Industry participants said the IDA process provides greater visibility on how governments intend to manage large-scale digital infrastructure investment. The NSW approvals and consultation process kick-off signal a coordinated approach by the NSW government to shape the next phase of data centre growth, supporting continued investment while introducing clearer expectations around sustainability and infrastructure contributions.

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