CMS Real Estate Data Centre Consenting in Sweden

In Swedish jurisdiction there is no universal data centre consent, but the investment is subject to a standard development process, requiring obtainment of construction decisions, the same as for other classes of assets.

Any large construction or land utilization in Sweden must be in accordance with the Planning and Building Act (Sw. plan- och bygglagen) with associated regulations. The land utilization must be in accordance with the general municipal master plan (Sw. översiktsplan) and other prevailing zoning plans (Sw. detaljplaner). The municipality may require a zoning plan for the land even though the area is zoned correctly in the master municipal plan.

Everyone may apply for a zoning plan. The zoning plan is construed by the municipality and opinions are obtained from those affected by the proposed zoning plan. The municipality council (decision-making can be delegated in some cases) approves the zoning plan after a political process. If the zoning plan is approved, it sets the legal framework for the future land utilization within its geographic area. Furthermore, a building permit in accordance with the plan must be approved. A start notification is required in order to start the construction of the data centre and a certification of completion is required in order to legally use the construction.

Moreover, the municipality may obligate private entities to enter into a so-called development agreement (Sw. exploateringsavtal) or a land assignment agreement (Sw. markanvisningsavtal) with the municipality. There is a legal framework in place outlining what such agreements may deal with, and which limits the municipalities authority.

The construction and operation of a data centre is in itself not subject to environmental permits. However, a data centre will use, collect and dispose of large volumes of water, which normally will be subject to environmental permits.

If an area is designated for “technical facility”, which in short includes facilities for the production, distribution, transformation or handling of e.g. electricity, telecommunications, TV and radio signals and digital data traffic, the zoning plan may be deemed to automatically authorize a data centre. This is a relatively new user class and thus does not appear in older zoning plans. Zoning plans with the user class “industry” may be considered to authorise a data centre. However, this is normally not the case, and a planning procedure must be initiated. 

Building permits can be applied for, and planning procedures initiated by, someone other than the property owner (e.g. by a lessee), but the property owner's consent is required for the planned construction on and/or use of the property.

• Understanding the legal landscape and current political policy both on a municipal, regional and national level. Understanding the possibility of water supply and disposal.
• Researching of which areas have available grid and power capacity, with advantageous grid tariffs (i.e., location close to the energy production).
• Pre-application discussions with local authorities, other stakeholders, contracting parties and suppliers. If there is no existing grid connection, there will be a need to engage with local grid owners or to study the possibility of getting an own grid concession.
• Submitting a proposal for new zoning plans if required by current zoning plans towards authorities and/or submitting an application for a building permit. Securing a grid connection agreement with a grid owner or applying for a grid concession.

Although not a part of the consenting process for construction, securing a grid connection and also power supply should be initiated at the same time – or even before – as consenting procedure starts.

In order to secure a grid connection, one needs to enter into an agreement with grid owners or apply for a grid concession. Securing grid capacity can be challenging in Sweden since there is a high demand and competition for existing and future grid capacity.

Grid owners normally have a lengthy study process by which technical studies are performed. Furthermore, the grid owners normally need to secure a right to lay out cables on third party properties. The above processes will normally consume several years, and can be prolonged by property owners opposing the laying out of cables requiring the grid owner to secure cadastral decisions / right of way decisions.

If instead an own grid concession would be opted for (or required), this requires consent from the Energy Markets Inspectorate and puts high demand on compliance with energy legislation and other. Land rights for cables would still need to be secured.

As mentioned above, the planning user class “technical facility”, which includes the establishment of data centres, is relatively new. Current zoning plans with the user class “industry” may authorise a data centre. However, this is normally not the case. Therefore, the number of existing zoning plans that automatically authorises data centres is limited and a planning procedure must be initiated.

As mentioned above, the use, collection and disposal of large volumes of water will normally have environmental implications. Depending on the area (technical area or an area of high biological value), an environmental permit may be required. Consent/agreement with water utilities and municipalities may also be needed.

It will have an impact on the possibility of taking out water and disposing of water (cold or hot).