Freezing connections to the power grid: the Norwegian decision that is bringing down Azrieli's stock

Azrieli's stock falls about 7% after Norway's power grid operator froze new allocations for connecting server farms. Azrieli operates in the country through Green Mountain, but stated that the freeze is not expected to negatively affect its operations.

Azrieli's stock fell about 7% at the start of the trading week, following an announcement by Norway's national power transmission system operator of a temporary freeze on new allocations for connecting server farms to the grid. Azrieli operates in Norway through its subsidiary Green Mountain Global, which fully owns four server farms with a total installed capacity of about 174 megawatts. The company acquired the operation in 2021 for about NIS 2.8 billion. In the first half of the year, the operation reported revenues of about NIS 445 million, an increase of about 5% compared to the same period last year, and NOI of NIS 213 million, a decrease of 4%. Alongside the freeze, the Norwegian government announced its intention to formulate new licensing rules. However, Azrieli stated that the freeze is not expected to negatively affect its income-generating projects. At the end of last year, Green Mountain signed a major agreement to establish a server farm with a capacity of 80 megawatts at a new campus in Norway, subject to obtaining approvals including a connection to the power grid. The company ruled out that the announcement would delay the move.