Noida Authority has recently granted permission to Adani Enterprises Limited to sublease 10 acres in Sector 80 to Noida Data Centre Limited. This data centre will be a joint venture between Adani Enterprises and EdgeConneX for developing a 50 MW data centre park. The decision reversed their earlier rejection. It also followed an intervention by the state government sighting the amended Data Centre Policy of 2022. This is a massive step taken up by the Adani Group in the tech sector. It will allow the global conglomerate to rise above the Adani Group Controversies.
The Approval to Set Up the Data Centre
Noida Authority has recently approved the subleasing of certain acres in Sector 80 to Noida Data Centre Private Limited. This entity is a Special Purpose Vehicle formed by Adani Enterprises and EdgeConneX. AdaniConneX plans to develop a 50 MW hyperscale data park which would attend to the technical needs of the region. The move was followed by an intervention by the state government authority which had earlier rejected AEL’s request. The request was rejected mentioning that the agreement that the two had signed did not have much provision.
AEL once again took this request with the industrial development division where it said that there was a provision to sublease a plot under the amended UP Data Centre Policy of 2022. These steps have not only helped the Adani Group boost its presence in the data centre sector but have also managed to put a stopper to the Adani Group Controversies.
The Initial Deal
On 12th April 2021, AEL was handed 10 acres in Sector 80 for INR 70 crore. This was to set up the data centre in 6 years. The SPV Noida Data Centre Limited was created for the project by AdaniConneX. This was going to be one of the biggest ventures in the data sector segment in Noida. On 7th March 2024, AEL sought the authorities’ permission to sublease the land free of cost. They claimed that the amended government policy of 2022 allowed it to do so. It also permitted the Industrial Development Authority to decide on whether to charge a fee for the same or not. AEL also mentioned that the subleasing was crucial because the conglomerate has elaborate plans to develop the 50 MW data centre park through its SPV.
The Approval Process
A committee composed of the chief legal advisor, finance controller, and an additional CEO was given the responsibility to review the request. The panel, however, recommended against the application. They said that since AEL was the original allottee of the plot, it must complete the project first. Then it should obtain an occupancy certificate before placing the subleasing request. After this decision was made, AEL escalated its plea with the industrial development department. This department sought an opinion from the electronics and IT departments.
The Electronics and IT Department insisted that the data centre policy should take precedence in this case over the lease deed and the terms and conditions of the scheme. Noida Authority was subsequently asked to reconsider the request made by AEL. After that, Adani Enterprise Limited was issued a letter of comfort by Uttar Pradesh Electronics Corporation Limited on 1st July 2022 as a Data Centre Park. Its request regarding the sublease was declared to be under provisions of the data centre policy as mentioned by the IT and Electronics Department.
The report also specified that Adani Enterprises was previously granted subleasing permission for an institutional plot in Sector 22 for an IT/ITES project. The plot measured 8.5 acres. It was allotted to Adani Enterprises on 20th July 2021 at a total cost of INR 103.4 crore. The sublease was executed on 3rd May 2023 in favour of DC Development Noida Limited. Similarly, as per the data centre policy, subleasing permission for the project located in Sector 80, Noida, can also be granted to the Noida Data Centre Limited.
The plea to sublease the data centre plot was placed after proper discussion during a board meeting of the authority last month. It was approved as the authority had already amended the adopted the amended data centre policy in December 2022.
Conclusion
The Adani Group has made some massive contributions to the data centre. Even amidst the Adani Group Controversies, the group continued to take up extensive projects in this sector. In the upcoming years, we will surely witness the global conglomerate take up more such initiatives which will strengthen our country’s digital boundaries.
