Technical, Regulatory, and Financial Conditions for Bankable Water Reuse Projects: A Multiple Case Study of AI Data Center Cooling Infrastructure

This study examines the conditions under which urban water reuse can become bankable cooling infrastructure for AI data centers. Using Microsoft-Quincy as the benchmark case and Google Douglas County and Amazon Web Services as comparative cases, it applies a fit-forpurpose framework across three interdependent dimensions: technical, regulatory, and financial. Technical fit concerns water quality, cooling-system compatibility, supply reliability, monitoring, backup capacity, and residuals management.

Regulatory fit concerns permitted end use, discharge requirements, institutional authority, public acceptance, and governance. Financial fit concerns capital and operating costs, tariff design, long-term offtake, creditworthy demand, cashflow certainty, and risk allocation. The study argues that no dimension is sufficient independently.

Bankability emerges when all three are aligned strongly enough to convert reclaimed water from a technically possible resource into a reliable utility service with recoverable costs and manageable long-term risks.