Sherbrooke has approved conditional agreements that would let Keel Infrastructure move an existing 96 MW allocation from three Bitcoin-mining sites to a consolidated AI and high-performance computing campus, but provincial consent, a complete municipal review, an AI-ready design, a tenant and project financing remain unresolved.
Sherbrooke has allowed Keel Infrastructure to advance agreements for land and electricity. That preserves a route to move 96 megawatts of existing capacity into a single site, but the vote does not establish that the Bitcoin miner remaking itself as a digital-infrastructure developer can turn the allocation into an operating AI data center.
Sherbrooke authorized Keel to enter an agreement with Hydro-Sherbrooke for the transfer and operation of 96 MW and approved a land purchase agreement, the company said in its July 15 announcement. The transfer and recategorization from Bitcoin mining to high-performance computing and AI still require review and approval by Québec’s Ministry of Economy, Innovation and Energy.
The plan would consolidate allocations attached to three existing mining sites. A retained account identifies them as Bunker at 48 MW, Leger at 30 MW and Garlock at 18 MW. The city’s local electricity agreement dates to 2018, and Keel is not asking for additional megawatts.
That is a power transfer, not a simple reuse of mining buildings. The proposed facility would be a new structure of about 16,400 square metres on parts of four wooded industrial lots near Hydro-Sherbrooke’s Orford substation, according to the local account. The legal buyer named there is Backbone Hosting Solutions, associated with the former Bitfarms business now operating as Keel.
The offer gives Keel six months to submit a complete use application. It also sets deadlines of 36 months to begin construction and 60 months to finish. The city will take a later, formal position on the complete project; if councillors reject Keel’s proposed conditions, the land sale is cancelled. Keel separately says closing is expected in the first quarter of 2027 after site inspections, feasibility work and municipal approvals.
A commercial-property report illustrates why the transaction boundaries matter: its opening mixes the Sherbrooke project with a separate 100-acre Montreal-region purchase and says 98 MW, while its body describes the Sherbrooke consolidation as 96 MW. Keel’s announcement and the other retained accounts consistently use 96 MW for Sherbrooke.
Keel’s strongest asset is real: the company already controls energized capacity in a market where new large loads face long development timelines. Its 2025 annual report classified Sherbrooke’s 96 MW as current energized capacity and secured gross data-center capacity as of March 27, 2026.
The same filing narrows the company’s larger pipeline claim. Of 2,161 MW listed across Keel’s portfolio, 648 MW was categorized as secured gross data-center capacity and 1,513 MW as additional capacity under evaluation. All 170 MW at its Québec sites was energized, but those sites were still being used for Bitcoin mining.
Keel is not alone in trying to revalue mining power as AI infrastructure. A sector account describes a wider shift among public miners, citing CleanSpark’s $6.6 billion data-center lease while also citing an estimate that miners pursuing AI infrastructure face a $50 billion funding gap. Keel’s own filing says it competes with established colocation and wholesale operators, independent developers, hyperscalers building for themselves, infrastructure investment platforms and other former miners.
The technical gap is equally important. Keel says HPC facilities require higher redundancy, advanced cooling, power-quality management, fiber connectivity and customer uptime commitments than mining sites. The Sherbrooke announcement supplies no detailed design for those systems, including the alternative power sources the city says the project will need.
Commercial proof is also pending. Keel’s HPC infrastructure business generated no revenue in 2025, and the company said in the annual report that it had not entered any HPC data-center lease agreement as of the filing date. Its development model places lease execution after land, power, permitting and design work; the company says a signed lease is generally required to obtain project- or parent-level debt at a lower cost than would otherwise be available. The Sherbrooke announcement names no tenant.
The land transaction is valued at C$2.2 million, while the local account estimates investment in the proposed facility at nearly C$1.8 billion. Those numbers are not equivalent commitments: the first is the price in a conditional offer, while the second is an estimate for a project that has not completed municipal review or disclosed a customer.
Keel has raised substantial corporate capital, but none of the retained documents assigns it specifically to Sherbrooke. The annual report says the company issued $588 million of 1.375% convertible notes in October 2025. In June 2026, it closed another $458 million of 1.25% convertible notes due in 2032, producing about $445.4 million before offering expenses and capped-call costs, according to the financing announcement.
The June proceeds were designated for general corporate purposes, potentially including deposits on long-lead equipment or collateral for letters of credit used to expand or accelerate data-center developments. The same announcement says existing liquidity was expected to take Panther Creek, Sharon and Moses Lake through leasing. It does not extend that site-specific assurance to Sherbrooke.
That omission does not show that Keel lacks the money to develop the project. It does mean the financing cannot be treated as a Sherbrooke construction commitment. Keel’s own development sequence expects construction to be financed with a combination of debt and equity-linked capital after a site is leased.
Hydro-Sherbrooke cannot assure the proposed facility’s full load during outages or periods of high winter consumption, the local account says. The city therefore requires alternative energy sources, making the design of backup generation a material part of the project rather than a secondary operating detail.
Councillors Laure Letarte-Lavoie, Fernanda Luz and Catherine Boileau dissented from the conditional land sale. Their stated concerns included potentially powerful and polluting generators, exceptional energy consumption, noise, water, environmental and territorial effects, and a public consultation process beginning only after the proposal had advanced. A councillor who supported the measure stressed that it was an initial decision and said the council would receive the information needed for a final vote.
Electricity pricing is unsettled too, although the scope requires care. Québec’s energy regulator lists Hydro-Québec Distribution’s proceeding on proposed tariffs for data centers and cryptocurrency use as still in progress; Keel is participating as an intervenor. Keel’s annual report says rates in its municipal-network contracts adjust in response to tariff changes imposed by the regulator. Neither retained source establishes the final rate that would apply to a recategorized Hydro-Sherbrooke campus.
The next evidence will arrive in stages:
Until those steps are documented, Sherbrooke’s vote gives Keel a valuable development path and keeps its 96 MW allocation in play. It does not yet resolve whether the company can deliver an AI-ready facility at a price acceptable to a tenant, the city and the power system.
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