FT: BlackRock, Meta-linked $14B Texas data center insurance is partial
FT reports Meta and BlackRock’s $14B, 1GW Sopaipilla data center in Texas has about $450M of property coverage once operational and $645M of terrorism coverage, with lenders using modeled “probable maximum loss” scenarios rather than complete-loss insurance.
FT reports META and BlackRock's $14B, 1GW Sopaipilla data center in Texas carries only partial insurance coverage, reflecting how difficult and expensive it has become to fully insure gigawatt-scale AI infrastructure.
The project has about $450M of property coverage once operational, $645M of terrorism coverage and additional protection for construction delays and liability.
Rather than insuring against a complete loss, lenders are relying on modeled "probable maximum loss" scenarios, an approach becoming more common as data center projects grow into the tens of billions.
Importantly, the debt still received strong investment-grade ratings, including A+ from S&P and AA- from Fitch and KBRA.
BlackRock has also argued that severe weather risk in El Paso is relatively low and that modern data centers are unlikely to suffer a total loss even in a major catastrophe.