Israel’s biggest data center to be built in Ashdod

Data centers developer Serverfarm, owned by Manulife investment and the Papouchado family, together with the Israel Infrastructure Fund (IIF) will build a 130 megawatts data center in Ashdod for Dalia Energy with an investment of $1.5 billion. This, in addition to several billion dollars for the acquisition of servers, cooling equipment and electricity.

The Ofek data center will later be enlarged to 200 megawatts. This is the biggest data center in Israel currently planned, with Dalia relying on direct electricity supply from the new power station being built inorth of Ashdod port.

The data center will be built on land leased by Dalia to a new corporation to be established by Serverfarm (50%) and IIF (50%), with Dalia retaining the option to receive 30% of the company’s shares through Eshkol Energies, in which Dalia holds 75%. The land will be leased for at least 24 years and 11 months.

Adjacent to the data center, a new power station called Eshkol Avshal (named after Avshalom Haran from Kibbutz Be’eri who was murdered on October 7) will be built, which will provide electricity based on natural gas with a capacity of 850 megawatts. The construction of the station is still in the stage before financing with Bank Hapoalim, which should be closed during the second quarter. The data center will open for commercial activity in the second half of 2029.

Not the only one entering the industry

Dalia is not the only player entering the data center industry – in recent weeks it has become clear that Nofar is also trying to enter the field through the purchase of land in Shoham to build a large data center, and last week Doral and Ampa announced a partnership in principle to build data centers near power stations.

The growth of AI requires the construction of data centers – large industrial facilities containing hundreds and sometimes thousands of server racks in which Nvidia graphics processors are embedded that perform complex calculations. These are generally used to train AI models, run them, and also for cloud computing activities required for AI services.

While the construction of the structure will cost $1.5 billion according to estimates, equipping it with thousands of servers in which Nvidia’s newest chips are embedded is expected to result in costs that could reach $4-5 billion. As revealed in “Globes,” Dalia received a license from the Ministry of Communications to deploy underwater optical fiber to Europe, which will allow the data center to transmit data at high speeds and in high volume to other servers in the world, which is a critical operation for AI computation.

Published by Globes, Israel business news – en.globes.co.il – on February 23, 2026.

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