By: Dana Lucas and Chad Eggerman

A Saskatchewan data centre project needs more than a site and a power source. Its legal structure determines who controls the project, raises financing, bears operational risk, and receives the economic benefits. This article outlines five potential structures for data centre operators, independent power producers (“IPPs”), and First Nations, and identifies the principal commercial trade-offs of each. Early legal advice can help operators, power producers, First Nations and municipalities identify opportunities, protect their interests and address key project risks before making significant commitments.

Saskatchewan Regulatory Framework

Saskatchewan’s Data Centre Framework released on August 27, 2026 (the “Framework”) establishes the provincial policy context for proposed data centre developments in Saskatchewan. Project proponents must distinguish the Framework’s policy preferences from mandatory eligibility requirements and statutory approvals. The Framework does not, by itself, authorize electricity supply or replace project-specific approvals. Power purchase agreements (“PPAs”) must be considered separately from applicable SaskPower consents and interconnection or service arrangements. The regulatory treatment of electricity generation and supply will depend on the location of the facilities, ownership arrangements, electrical infrastructure, and whether electricity is supplied internally or between separate legal entities. Common ownership of generation and computing facilities does not itself ensure compliance with those regulatory requirements.

Potential Data Centre Legal Structures

These models are illustrative and may overlap or be adapted to the participants’ ownership, financing, and operational needs.

1. Separate Data Centre Operator and Power Generator

• Best suited to: Separate ownership and financing of the data centre and generation assets.

• Principal trade-off: The parties must align power delivery, commissioning, credit support, and default remedies across separate projects.

• Legal entities: DataCo and PowerCo are separate Saskatchewan corporations or extra-provincially registered corporations. Either may instead be a limited partnership (“LP”) with limited partners and a corporate general partner.

• Governance: Each corporation has its own board. Where an LP is used, its corporate general partner manages the partnership, subject to the LP agreement.

• Financing: DataCo and PowerCo each separately raise equity and project debt or seek public funding or grants.

• Profits: DataCo earns revenue and profits from computing services. PowerCo earns its own profit from selling electricity to DataCo.

• Operations: Specialist teams at DataCo and PowerCo separately run computing and generation respectively with a joint DataCo/PowerCo committee established to coordinate.

• Key contracts: Long-term power purchase agreement (“PPA”), together with applicable SaskPower consents and interconnection or service agreements; site leases and easements; separate engineering, procurement and construction (“EPC”) contracts; fuel and generation operating agreements; hosting agreements; financing and security documents. Lawyers negotiate PPA capacity, pricing, reliability, curtailment, commissioning, defaults and termination; coordinate permits and ensure both financing packages work together.

• Integrated Data Centre Operator and Power Generator

• Best suited to: A sponsor seeking unified ownership and control of both facilities.

• Principal trade-off: Generation and computing risks sit within the same entity and financing package.

• Legal entities: One corporation owns both the data centre and electricity generation facilities (“DataPowerCo”).

• Governance: DataPowerCo has a single board of directors which controls both computing and generation. DataPowerCo has employees or independent contractors on separate management teams responsible for data centre operation and power generation.

• Financing: DataPowerCo raises equity and project debt or seeks public funding or grants to finance both the data centre and the generation facilities.

• Profits: DataPowerCo earns profits from selling computing services after deducting electricity generation, financing and operating costs. Distributions to shareholders are subject to applicable law and financing restrictions.

• Operations: DataPowerCo’s management teams separately operate computing and generation, with a separate Coordination Committee coordinating electricity supply, maintenance and capacity requirements.

• Key contracts: shareholders’ agreement (where applicable); hosting agreements; EPC contract or contracts for the data centre and generation facilities; fuel supply and generation operating agreements; site leases and easements; applicable SaskPower consents and interconnection or service agreements; financing and security documents. A third-party PPA is generally unnecessary where the same legal entity owns and operates both facilities and uses the electricity internally. Common ownership does not itself eliminate electricity consent or other approval requirements. Lawyers establish ownership and governance, negotiate construction and operating agreements, coordinate permits, allocate operational risks and advise on financing and security.

• Data Centre Joint Venture

• Best suited to: An operator and IPP seeking shared ownership and long-term alignment.

• Principal trade-off: Shared control requires clear funding obligations, reserved matters, deadlock procedures and exit rights.

• Legal entities: DataCo and PowerCo establish a jointly owned joint venture corporation (“JVCo”) that owns both the computing and generation facilities. Unlike the integrated model above, this model expressly provides for shared ownership and control between the data centre operator and the IPP.

• Governance: DataCo and PowerCo appoint representatives to the JVCo’s board. A shareholders’ agreement records voting rights, reserved matters and major decisions and may also serve as the Joint Venture Agreement. Any separate JV agreement should be consistent with the shareholders’ agreement.

• Financing: DataCo and PowerCo contribute equity and may provide shareholder loans. The JVCo raises project debt or seeks public funding or grants, with shareholder support where required.

• Profits: The JVCo earns revenue from computing services and bears the cost of generating electricity for internal use. Any external electricity sales require separate commercial and regulatory consideration. Distributions to DataCo and PowerCo follow the agreed ownership and distribution arrangements, subject to applicable law and financing restrictions. Separate operating fees may be paid to each participant.

• Operations: Specialist teams from DataCo and PowerCo operate computing and generation respectively under management or operating agreements, with a joint management committee coordinating operations.

• Key contracts: shareholders’ agreement and, if separate, a consistent JV agreement; equity subscription and shareholder loan agreements; management and operating agreements; EPC contracts; operation and maintenance (“O&M”) agreements; fuel supply agreements; site leases and easements; applicable SaskPower consents and interconnection or service agreements; financing and security documents. No intercompany PPA is assumed where the JV corporation owns both facilities and uses its generation internally. A subsidiary structure involving separate electricity seller and purchaser entities would require separate analysis. Lawyers negotiate ownership, governance, capital contributions, future funding obligations, distributions, deadlock resolution, exit rights, operating responsibilities and financing arrangements.

• First Nation-Owned or Controlled IPP

• Best suited to: A First Nation seeking control of generation and long-term electricity revenues without owning the data centre.

• Principal trade-off: Returns depend on the PPA, DataCo’s creditworthiness, operating performance, and financing obligations.

• Legal entities: PowerCo, usually an LP controlled by a First Nation through its corporate general partner, owns the electricity generation facilities. DataCo is a separately owned corporation that owns and operates the data centre. Other investors may participate in PowerCo, subject to the agreed ownership and control arrangements.

• Governance: The First Nation controls the appointment of directors to the corporate general partner’s board under the agreed governance arrangements. The general partner manages PowerCo, while limited partners hold investment and consent rights under the LP agreement. DataCo maintains separate governance.

• Financing: PowerCo raises Indigenous equity, private investment, and project debt or seeks public funding or grants available for Indigenous participation in energy projects. DataCo separately finances the data centre.

• Profits: PowerCo earns profits from selling electricity to DataCo under a long-term PPA. Distributions to the First Nation’s investment entity and other investors follow the LP agreement, subject to applicable law and financing restrictions. DataCo separately earns profits from computing services.

• Operations: An experienced power generation operator operates PowerCo’s electricity generation facilities on behalf of the First Nation. DataCo separately operates the data centre, with a joint DataCo/PowerCo committee established to coordinate electricity supply and operational requirements.

• Key contracts: PowerCo LP agreement; First Nation investment and governance agreements; long-term PPA, together with applicable SaskPower consents and interconnection or service agreements; site leases and easements, including reserve-land leases where applicable; Operation & Maintenance (O&M) Agreements, EPC contracts; fuel supply and generation operating agreements; financing and security documents; Indigenous employment, procurement and community-benefit agreements. Lawyers negotiate PPA capacity, pricing, reliability and termination; establish First Nation ownership and governance rights; obtain necessary First Nation approvals; structure reserve-land arrangements and permissible security; coordinate financing and protect Indigenous ownership, economic participation and community benefits.

• First Nation–Operator Data Centre Joint Venture

• Best suited to: A First Nation seeking participation in data centre revenues and governance alongside an experienced operator.

• Principal trade-off: The investment requires careful allocation of funding obligations, management fees, performance standards and operator replacement rights.

• Legal entities: A First Nation economic development corporation and an experienced data centre operator jointly establish DataCo, usually a corporation or LP. Electricity generation is provided by a separately owned PowerCo, which may be owned by an IPP, the First Nation or other investors.

• Governance: Where DataCo is a corporation, the First Nation’s investment entity and the operator appoint representatives to its board. Where DataCo is an LP, they agree how its corporate general partner is controlled. Voting rights, reserved matters and major decisions are recorded in the applicable shareholders’ and LP agreements. PowerCo maintains separate governance.

• Financing: The First Nation and operator contribute equity to DataCo, which raises project debt or seeks public funding or grants. PowerCo separately finances electricity generation. The First Nation may contribute land rights or other assets, subject to applicable legal requirements.

• Profits: DataCo earns profits from computing services. Distributions to the First Nation’s investment entity and the operator follow the agreed ownership and distribution arrangements, subject to applicable law and financing restrictions. The operator may receive separate management fees. The First Nation may also receive land rental income. PowerCo separately earns profits from electricity sales to DataCo.

• Operations: The experienced data centre operator manages DataCo’s computing operations under a long-term management agreement. PowerCo operates electricity generation through its own specialist team, with a joint DataCo/PowerCo committee established to coordinate electricity supply.

• Key contracts: DataCo unanimous shareholders’ or LP agreement; equity contribution and shareholder loan agreements; long-term data centre management agreement; hosting and customer service agreements; long-term PPA between DataCo and PowerCo, together with applicable SaskPower consents and interconnection or service agreements; site leases and easements, including reserve-land leases where applicable; O & M agreements, separate EPC contracts; financing and security documents; Indigenous employment, procurement and community-benefit agreements. Lawyers negotiate ownership percentages, First Nation governance and voting rights, capital contributions, profit distributions, management fees, operator performance standards, replacement rights, PPA terms, reserve-land arrangements, financing and Indigenous economic benefits.

How can Procido LLP help?

Procido LLP can help operators, IPPs and First Nations compare these structures, prepare and negotiate a term sheet, and advise on its execution. The term sheet will identify which provisions are binding and which remain subject to definitive agreements. Our lawyers can advise on ownership and governance, land rights, electricity (SaskPower) consents and PPAs, construction and operating contracts, financing, lender security, and conditions precedent to financial close. We can also assess applicable Canadian-control, data-sovereignty, workforce and procurement commitments, and coordinate legal due diligence with engineering and technical advisers on generation and backup feasibility. For operators, this may mean aligning power delivery with customer commitments; for IPPs, negotiating a financeable PPA; and for First Nations, protecting governance rights, distributions and long-term economic participation. Contact Procido LLP before committing to land, power arrangements or exclusivity, so that the project’s ownership, approvals, and financing can be considered together.

Procido LLP also advises on design and professional service agreements, engineering, procurement and construction contracts, construction risk allocation, commissioning requirements, performance guarantees, project delays, and the contractual coordination of generation and computing facilities.

Municipalities and Data Centre Development

Although the five structures described above do not involve municipal ownership, Saskatchewan municipalities have important planning, development approval and infrastructure responsibilities in data centre projects. Municipalities act as regulators and permitting authorities, not owners, in the five models described above. Procido LLP also advises municipalities on data centre development, separately from its work for operators, IPPs and First Nations and subject to applicable conflict-of-interest rules. The Municipal Practice Group can help municipalities develop data centre zoning rules, assess applications and council’s approval powers, negotiate development agreements allocating infrastructure costs and risks, identify environmental requirements, and guide public consultation and lawful decision-making. For municipalities, proactive planning can help align data centre development with local infrastructure capacity, community priorities, and long-term economic benefits. For related municipal planning issues, see “Data Centres in Saskatchewan: Who Gets to Decide? — Part I of II: From Investment to Municipal Planning.”

Disclaimer

This article is provided for general information purposes only and does not constitute legal advice or a legal opinion. The applicable laws, policies, regulatory requirements, and commercial considerations may vary depending on the circumstances of a particular project and may change over time. Readers should obtain legal advice before acting on the information contained in this article. For advice concerning data centre development, electricity generation, project structuring or related matters, contact Procido LLP at http://www.procido.com.