Hub Power Company (Hubco) has delayed its proposed data center project because of high electricity and technology costs, substantial infrastructure requirements and uncertainty over financial returns. The development was highlighted in a research note issued by Topline Securities following the company’s annual general meeting. Hubco management indicated that the commercial viability of the project remains a key consideration as the company assesses the investment requirements associated with entering Pakistan’s data center market. The delay reflects the challenges of establishing large-scale digital infrastructure, where reliable power supplies, significant upfront capital and suitable facilities are essential to long-term operations.
The company has indicated that the project’s prospects could improve if data centers were established in dedicated zones with access to multiple grid connections. Such arrangements could help address electricity supply requirements and provide infrastructure better suited to facilities that need to operate continuously. Data centers require reliable power to run servers, networking equipment, cooling systems and other critical components. Any disruption in electricity supply can affect operations, making dependable energy infrastructure an important consideration for companies planning investments in this sector. Hubco’s comments suggest that the availability and design of supporting infrastructure will influence its assessment of whether the proposed project can generate commercially sustainable returns.
Hubco has also indicated a preference for entering the data center market at a larger scale instead of beginning with a smaller facility. According to the company’s comments, management is considering a capacity of around 100 megawatts, compared with smaller facilities typically planned at between 5 and 10 megawatts. This approach would represent a substantial infrastructure commitment and would require careful assessment of electricity availability, technology costs, cooling requirements and customer demand. A larger facility could provide opportunities to serve multiple customers and support substantial computing workloads, but it would also require significant investment before operations could generate revenue.
The company’s preference for a larger development highlights the importance of scale in data center economics. These facilities require substantial spending on land, buildings, power connections, backup systems, cooling equipment, servers and network infrastructure. The financial performance of a project depends on whether demand for computing, storage and hosting services can support the initial investment and ongoing operating costs. High electricity prices can further affect operating margins because power consumption represents a major expense for data centers. Hubco’s decision to delay the project indicates that these factors remain important to its evaluation of the investment opportunity.
No revised launch date, estimated investment amount or final project structure has been disclosed. The company has also not announced a confirmed decision to abandon the proposal. Instead, the project remains subject to questions about its commercial feasibility, infrastructure requirements and potential returns. The availability of dedicated data center zones with multiple grid connections could be one factor in improving the investment case, although the company has not provided a confirmed timeline for any further development.
Hubco’s deliberations come as other companies pursue opportunities in Pakistan’s developing data center market. Gul Ahmed Energy Group’s Quantum Global Data Centre has announced plans for a major project in partnership with Huawei Pakistan. Meanwhile, Sky47, backed by Mari Energies, has launched its artificial intelligence-ready Karakoram-01 facility. These developments indicate growing interest in infrastructure capable of supporting cloud computing, data storage and artificial intelligence workloads.
Separately, Indus Cloud, Indus DC REIT and United Bank Limited have partnered to develop local data center and cloud infrastructure. Such initiatives reflect interest from corporate and financial institutions in expanding domestic digital infrastructure. Local facilities can support businesses that require computing capacity, data storage and cloud services, while infrastructure designed for artificial intelligence can accommodate workloads that demand substantial processing power. However, the scale and pace of future investment will depend on factors such as electricity costs, reliable grid access, financing conditions and the level of demand from customers.
Pakistan’s data center sector presents opportunities as businesses increasingly depend on digital services and advanced computing systems. At the same time, high operating costs and substantial initial investment requirements can make large projects difficult to execute without suitable infrastructure and a clear commercial model. Hubco’s proposed investment highlights the importance of addressing these challenges before committing capital to a major facility.
The company’s next steps will depend on its assessment of the project’s financial viability and the availability of infrastructure capable of supporting large-scale operations. Until further details are announced, the proposed 100-megawatt development remains an indication of Hubco’s preferred scale rather than a confirmed construction plan. Its progress will be relevant to Pakistan’s broader efforts to expand data center capacity and develop the infrastructure needed for cloud computing and artificial intelligence services.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.