Lebanon’s data centre landscape remains at an early but evolving stage, shaped by ongoing economic challenges alongside emerging digital and AI-driven ambitions. While large-scale infrastructure plans remain largely aspirational, there is growing interest in smaller-scale, private and hybrid data centre investments, particularly to support outsourcing, fintech and regional service delivery.

With strong human capital and increasing demand for reliable digital infrastructure, Lebanon presents selective opportunities for investors willing to navigate a complex but gradually stabilising market environment.

Firms exploring data centre investments must also understand their unique due diligence requirements. While these may vary depending on factors such as the development stage of the asset, there are fundamental elements that should be assessed before making an investment.

Explore these considerations in BDO’s checklist below.

BDO’s Data Centre Due Diligence Checklist

The following key areas should be assessed when evaluating data centre investment opportunities.

Power Availability

With demand for AI increasing, investors should evaluate a data centre’s power capacity and energy requirements.

Power Supply

Assessing the age and performance of internal equipment, including transformers, switchboards, generators, distribution systems, safety devices, and back-up power supply, can help firms determine whether upgrades are needed to handle AI workloads.

Power Capacity

Examine the facility’s current capacity and forecast future needs arising from increasing AI use. Is the data centre equipped to scale operations as AI workloads increase over time?

Contract Terms and Structure

What existing energy contracts does the data centre have in place? Ideally, the facility should have a long-term energy contract, which reduces the risk of cost variability and service interruptions.

Cooling Capabilities and Environmental Impact

AI chips generate significantly higher thermal load than other types of chips and can place tremendous strain on local water supplies and infrastructure, negatively affecting the communities where data centres operate, especially those in already water-stressed regions.

Cooling Method

What kind of cooling system does the data centre use? Each method — liquid, air, immersion, evaporative, hybrid, or free cooling — has different implications for the data centre’s ability to accommodate AI’s high-density computing power. Liquid and immersion cooling, for example, are considerably more efficient than air-based systems.

State of Systems

Review the efficiency of a data centre’s cooling equipment to help forecast maintenance costs and, in turn, profitability. Firms can request power usage effectiveness (PUE) ratios and maintenance logs for greater visibility during due diligence.

Water Consumption

Evaluate a data centre’s water usage and any consumption strategies the facility has in place, such as closed-loop liquid cooling systems and alternative cooling fluids. Large-scale data centres typically use significant volumes of water daily due to cooling needs driven by AI workloads, which carry both operational and cost implications.

Noise Pollution

Assess a data centre’s noise pollution from both day-to-day operations and back-up power generators. As many suburban areas seek to limit data centre development due to excess noise and power consumption, it is crucial to identify and address these concerns before committing to an investment.

Workforce

Data centres often experience high turnover rates due to demanding work environments and an ageing workforce. Because they are typically built in rural areas, data centres are also more susceptible to worker shortages. Investors should evaluate a data centre’s workforce needs and assess how they may evolve over time.

Local Talent

Consider the data centre’s local talent pool. Can the available workforce support the facility’s cabling, equipment maintenance, and operational needs? If not, the data centre may need to accommodate workers from other areas on a temporary basis, mirroring arrangements used in sectors such as oil and gas, which can become extremely costly. Some organisations are also identifying and developing talent through collaboration with local education partners.

Workforce Needs Now and in the Future

Understand how the data centre’s workforce needs may change as its AI capabilities mature. For example, how many people does the data centre need to employ to maintain its operations? Will the facility require additional security personnel? What training investments may be needed? A data centre in the early stages of AI adoption will have very different workforce needs from one with advanced AI infrastructure already in place.

Specialised Talent

Data centre workers with specialised skills, such as advanced AI expertise, are in high demand and may therefore expect higher compensation packages. Talent poaching has also become more common. Review the target data centre’s compensation and benefits offering, as well as broader recruitment strategies to attract and retain top talent. Consider the cost of turnover, availability of talent, and competitive pressures when developing the talent philosophy used at each data centre.

Security

A data centre’s security directly influences the long-term viability and value of an investment, as a breach — whether through a back door or a firewall — can result in serious consequences.

Physical Facility Protection

Assess a target facility’s defence-in-depth capabilities to manage access points and related vulnerabilities. Unauthorised data centre access remains a risk, especially for colocation arrangements. A comprehensive security plan should form part of the due diligence process, including consideration of vehicle blockades, cage systems, door hinges, and other protective measures designed to secure the building. Data centres serving higher-risk industries such as critical infrastructure, defence, government contractors, or technology providers may require even more robust investment in security.

Cybersecurity

Review a data centre’s digital defence capabilities, including the storage and access of identities and surveillance systems, as well as incident response capabilities and after-action reports for recent incidents. The data centre’s business model should drive the associated control levels and support an effective information security management system. A facility’s network monitoring practices and incident response procedures have a direct impact on tenants’ data protection and regulatory compliance.

Disaster and Recovery Risks

Consider a data centre’s environmental risk factors and their potential impact on facility infrastructure. For example, is the facility located near a disaster-prone zone? What infrastructure does the data centre have in place to withstand a severe weather event?

Regulatory Requirements

Data centres are heavily regulated, particularly because of their resource use and links to sectors that handle sensitive information, such as healthcare and financial services. Before investing in a data centre, understanding the facility’s regulatory requirements based on its current and prospective tenants will help maintain an accurate risk picture.

State and Local Reporting Requirements

Assess any state or local rules relating to a target location, as they can significantly affect reporting requirements and compliance costs.

AI and Cybersecurity Compliance

It is critical to verify that a data centre maintains compliance with all in-scope regulations. Investors must also ensure that the data centre meets industry-standard cybersecurity requirements, such as ISO 27001 or NIST frameworks.

Emerging Regulations

Anticipate future regulations around alternative energy sources, particularly nuclear power, which is gaining traction as a data centre energy solution. New compliance requirements in this area could affect operational costs and project timelines.

Third-Party Attestation

To verify that a data centre meets all necessary compliance requirements, request third-party attestations and certifications. SOC 1 and SOC 2 are the baseline documentation for most facilities, although additional certifications may be required depending on the data centre’s tenants. For example, a data centre hosting a healthcare tenant may need documentation demonstrating compliance with HIPAA.

Real Estate Leasing

It is important to understand real estate leasing terms in order to model a target data centre’s cash flow stability accurately.

Lease Terms

Consider prioritising data centres with longer, for example 15+ years, and more favourable lease structures. A triple net lease (NNN) is ideal for a data centre, as the tenant pays base rent plus the net of operating expenses, including property taxes, building insurance, and maintenance.

Tenants

Verify the creditworthiness of existing or prospective tenants to ensure stable, long-term cash flows that justify the acquisition price. Investors must also consider what alternative uses may exist for the facility should one or more tenants depart.

Customer Concentration Risk

How many tenants does the data centre have? Does it have tenants across more than one industry? Tenant base composition can reveal potential cash flow vulnerabilities and customer concentration risk.

_{Original content provided by BDO USA.}

How BDO Lebanon Can Help

BDO Lebanon provides partner-led advisory, consulting and due diligence services for investors and operators exploring opportunities within Lebanon’s evolving digital infrastructure landscape. Combining deep local market understanding with global sector expertise, we support clients across the full investment lifecycle, from feasibility assessment and business planning to financial, tax and operational due diligence, as well as restructuring and transaction advisory.

We work closely with clients to assess risks, validate assumptions and structure investments in a way that balances resilience with long-term value creation. Our experience in navigating uncertainty and supporting cross-border investors enables us to deliver practical, commercially grounded insights at every stage of the investment process.

If you are considering opportunities in Lebanon’s data centre and digital infrastructure space, our team is ready to support you in making informed, confident and well-structured investment decisions.

CONTACT OUR TEAM