New Era Energy & Digital (NASDAQ:NUAI) announced that it has signed a non-binding letter of intent to form a joint venture to develop and finance its Texas Critical Data Centers (TCDC) campus in West Texas.
The proposed partnership would bring together New Era, data center developer Stream Data Centers and an unnamed institutional investor who would provide equity capital and help arrange financing for the project.
The collaboration aims to support the construction of a large-scale data center campus designed for artificial intelligence and high-performance computing workloads.
Under the terms outlined in the letter of intent, New Era is expected to contribute to project site control and local relationships, while Stream Data Centers would assume responsibilities related to development, leasing and operations.
The institutional investor would lead the financing efforts, which are expected to include a significant portion of debt financing.
New Era said it plans to remain an active stakeholder in the project by co-investing equity alongside the institutional partner, rather than acting solely as a land provider.
The company said this structure could allow it to generate ongoing revenue through distributions tied to operating cash flow once the initial phases of the project come online.
The project is expected to be structured through a newly created limited liability company. The governance provisions are expected to include protections and rights for New Era as a partner in the company.
“The fact that Stream and a major infrastructure capital provider have chosen to partner with New Era validates both the strategic value of the TCDC campus and the strength of our development strategy and platform,” New Era CEO E. Will Gray II said in a statement.
“This letter of intent represents an important step in moving TCDC toward compliance, and we remain focused on moving toward a definitive agreement with Stream.”
TCDC’s campus is planned on a 438-acre site near Odessa, Texas. It is designed as a multi-phase development, with projected capacity to exceed 1 gigawatt over time.
New Era shares rose 6.7% on Wednesday morning.