Malaga grid shortage stalls 22,000 homes and investments worth billions

Infrastructure

Electricity capacity crunch is blocking multiple projects across the province, while Leonardo DiCaprio-backed firm moved its €1 billion plan after Málaga TechPark could not meet power needs

Dilip Kuner

An electricity grid shortage is costing Malaga province billions of euros in lost investments - including a €1 billion Leonardo DiCaprio-backed tech factory - while stalling 22,000 vital homes.

New data has revealed that Endesa, which controls grid distribution locally, has rejected 142 housing and business projects across Malaga province since January 2025 because there is no extra grid capacity.

The crisis hit a new low this week with the revelation that American tech multinational Diamond Foundry abandoned plans for a synthetic diamond chip factory in Malaga. The company, heavily backed by DiCaprio, would have created a massive microelectronic employment hub at Málaga TechPark, but opted to build in Zaragoza instead after local officials failed to guarantee the required electrical capacity.

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  • requested five megawatts of power but was only offered one. "Energy is the big problem we have at the moment in Malaga," Romera warned. "I'm not just saying this because of all the industrial projects or data centres that we are losing in the city: I'm also saying it because of the housing that will not be built, given the need there is. In the end, the lack of electricity capacity undoubtedly slows down the development and progress of the city."

    The gridlock has blocked the construction of 22,726 homes during an acute housing crisis. More than half of these stalled properties - 11,466 units - are earmarked for subsidised social housing.

    Malaga City Council confirmed that Endesa has issued negative reports refusing to supply electricity to the flagship Lagar de Oliveros and Soliva Oeste developments, completely halting 3,753 planned social housing units heavily promoted by the local government as a "solution" to alleviate the pressing shortage.

    The crisis is driven by the total saturation of high-voltage connection nodes managed by national energy giant Red Eléctrica. Endesa admitted that the electricity network "is going through a critical moment due to the sustained flood of access and connection requests resulting from electrification and reindustrialisation".

    Power requests received by distributor e-Distribución, an Endesa subsidiary, in Andalucía have rocketed from 964 megawatts in 2020 to 5.75 gigawatts in 2025, forcing the company to reject 75 per cent of all project applications.

    Endesa has stopped approving any projects on the Costa del Sol requiring more than one megawatt of power - the equivalent of electricity for around 150 homes. Across the rest of the province, the limit is capped at five megawatts.

    The gridlock has also frozen a €1.2 billion mega data centre project by Benbros, which requires 150 megawatts, alongside 97 electricity storage facilities, 12 data centres, seven industrial projects, and a new business park in Alhaurín de la Torre. Future expansions for Malaga’s third hospital, the airport, a microchip hub at TechPark, and the San Andrés marina project also hang in the balance.

    The shortage has been worsened by severe delays to vital infrastructure. Out of three new substations planned for the Costa del Sol, only one is operational. A substation in Mijas, known as Ventilla, still awaits environmental approval after two years of administrative procedures.

    Meanwhile, the completed Benahavís substation has sat idle for seven years due to a legal dispute over land expropriation for two electricity pylons.

    Malaga Mayor Francisco de la Torre has expressed deep concern and stressed the urgent need to strengthen infrastructure, lobbying Red Eléctrica and the Ministry for Ecological Transition to urgently approve and upgrade the network to preserve regional competitiveness.