Swedish infrastructure startup Scandinavian Data Centers (SDC) has secured an investment from real estate group Fastighets AB Balder to fund the construction of its first data centre, ‘ScandiDC I’, in Eskilstuna, Sweden.
The project will convert a former World War II-era mountain bunker into a 10 MW high-security facility, incorporating circular energy systems and local heat recovery.
The investment marks a step in Sweden’s growing push to align digital infrastructure development with sustainability and societal benefit, especially as data centre power consumption rises globally, driven in part by the expanding demands of AI workloads.
“Balder’s investment accelerates the development of our data center and shows how digital infrastructure can be both future-proof and socially beneficial,” said Svante Horn, CEO and co-founder of SDC. “Everything is in place for us to deliver a high-security facility where waste heat from operations is recovered and fed into the local district heating network.”
The 7,000-square-meter facility is housed in a decommissioned military bunker, providing robust natural perimeter protection. Target customers include public authorities, financial institutions, and critical infrastructure providers with stringent security and uptime requirements.
However, beyond its physical fortifications, the facility is designed to operate as part of a circular ecosystem. SDC’s model integrates data centres, battery energy storage systems (BESS), and residual heat recovery, effectively turning waste energy from data operations into a local heating source.
The first phase of ScandiDC I is projected to recover up to 10 MW of residual heat, enough to heat around 6,000 homes annually via Eskilstuna’s municipal district heating network, operated by Eskilstuna Energi & Miljö.
The project has been welcomed by local government as a contribution to both decarbonisation and regional digital resilience.
“This initiative strengthens Eskilstuna’s position as Sweden’s most environmentally progressive municipality and a pioneer in sustainable development,” said Jimmy Jansson, Chairman of the Municipal Executive Board. “Scandinavian Data Centers adds a climate-smart and local heat source, aligning perfectly with our vision of a circular and resource-efficient future.”
With data centres already accounting for around 3% of global electricity use—a figure expected to climb significantly with the growth of AI—the need for low-impact, high-efficiency infrastructure has never been more pressing. Most data centre developers focus on compute density and energy efficiency from an IT perspective. SDC flips the equation, designing around how much waste heat local systems can absorb.
“As the use of AI grows and its energy needs expand, it’s essential to build facilities that use energy efficiently and contribute to both power and heat supply in a circular energy system,” said Horn. “Our ambition is to create cutting-edge data centers with the highest standards in security, sustainability, and close cooperation with municipalities and local communities.”
Sweden, with its abundant renewable energy, low average temperatures, and strong digital infrastructure, has become a growing hub for sustainable data centre initiatives. SDC joins a cluster of regional players—including EcoDataCenter, Bahnhof, and Northvolt—pioneering circular economy models around energy-intensive industries.
Founded in 2021, SDC was launched by Svante Horn, Simon Angeldorff, David Malmström, and Jascha Buckholt, with a vision to embed data centres into local infrastructure in a way that maximises societal benefit per megawatt.
As Europe pushes to localise compute capacity while hitting its decarbonisation goals, projects like ScandiDC I could serve as a blueprint for infrastructure that is as circular as it is secure—turning bunkers of the past into engines of the digital future.
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