Private equity firm Green Arrow Capital has entered into a joint venture (JV) with energy producer Gruppo Lazzari to invest more than €1 billion ($1.16bn) in a network of data centers across Italy.

The initiative will be implemented through Core Stack, a company that Gruppo Lazzari launched in 2025 to develop high-performance and low-latency data centers powered by on-site renewable energy. Core Stack currently has 11 projects underway.

Green Arrow Capital and Gruppo Lazzari said that the joint venture has a “substantial” pipeline of projects with a “significant share” expected to achieve approval for construction in 2026.

Each new data center will have a renewable energy plant next to it configured under a “self-consumption model” to support the facilities’ operations.

Green Arrow Capital and Gruppo Lazzari have already worked together in the biomethane sector. The new joint venture comes against a background of increasing demand for computational capacity in Italy, driven by cloud and AI expansion.

The companies said the JV aims to establish a “benchmark for a new model of Italian data centers” that are local, sustainable, and have on-site renewable energy generation.

It is Green Arrow Capital’s second fund dedicated to energy and digital infrastructures, GAIF II, which is currently in the fundraising phase.

Daniele Camponeschi, chief investment officer at Green Arrow Capital, said: “By combining digital capacity and green power generation within an inherently sustainable model, we are not only addressing the challenges of the energy transition, but also contributing to strengthening data sovereignty, national security and the protection of a strategic sector for the country’s future competitiveness, while creating a protected, resilient and high value industrial asset.”

Anna Lazzari, CEO of Gruppo Lazzari, said: “At a time when Italy and Europe are facing increasingly significant energy challenges, we believe it is essential to develop a new industrial model capable of integrating renewable generation and computational capacity within the same ecosystem.

“Through Core Stack and with the support of Green Arrow Capital, we aim to promote a network of Italian data centers designed to be sustainable, resilient, and strategic for the country’s digital and energy sovereignty.“

Learn more about the data center market in Italy and Southern Europe, and meet with other executives and experts from the region at the DCN Milan event next year