BlackRock takes majority ownership of Meta’s massive El Paso data center. Here’s what to know.

BlackRock Inc. has taken an 80% majority ownership stake in Meta Platforms' massive data center project currently under construction in Northeast El Paso, Texas, through a joint venture. Meta, which will retain a 20% ownership stake and rent the data center, appears not to have breached its 2023 tax break agreement with the City of El Paso, according to a preliminary analysis by the city attorney's office. This deal, which involved a BlackRock-controlled company named Sopaipilla Investor selling $12.3 billion in bonds to fund the remaining construction, allows Meta to reduce its near-term cash funding requirements amid accelerated AI infrastructure spending.

City Representative Josh Acevedo, who represents the district where the data center is located, expressed concerns about Meta's lack of communication regarding the transaction and questioned the necessity of the original tax breaks given Meta's financial capabilities. However, Meta stated its commitment to El Paso remains unchanged, emphasizing the investment in the community and job creation. The financial arrangement also involved Meta's subsidiary, Wurldwide LLC, which still owns the land and project, avoiding triggers for assignment provisions in its contract with the city.

Separately, the El Paso Electric company is awaiting approval from the Public Utility Commission of Texas (PUC) to build a $500 million dedicated power plant adjacent to the data center. This plant is crucial as Meta's campus is projected to demand 1 gigawatt of electricity. PUC staffers have recommended denying the plant's approval, citing concerns over a lack of competitive bidding and insufficient analysis of ratepayer impacts. The PUC is expected to issue a decision later this year, though bondholders are minimally affected as Meta is required to start paying rent on a 'date-certain' basis in 2028, regardless of the power plant's status.