RAYMONDVILLE, Texas — Soluna Holdings is preparing to dramatically expand its footprint in Willacy County with Project Kati 2, an artificial intelligence and high-performance computing data center representing a nearly $4 billion capital investment, according to CEO John Belizaire.
Speaking in an in-depth interview with the RGG Business Journal following a community open house in Raymondville on Oct. 12, Belizaire outlined how the proposed facility will build upon the company’s existing local presence while drawing clean, curtailed power directly from the nearby Las Majadas Wind Farm.
Soluna already operates Project Kati 1 in Willacy County—an 83-megawatt facility sitting on roughly 30 acres that required an investment in the tens of millions of dollars and employs about 10 workers. Across the street, however, Kati 2 will operate on an entirely different scale.
"That facility will be significantly larger than the existing facility. We're talking about hundreds of thousands of square feet," Belizaire said. "It will require an almost $4 billion investment to build, and that investment will go into the building and the computers and so forth that are in there."
Once operational, Kati 2 will consume 166 megawatts of electricity—double the power draw of Kati 1—and employ approximately 40 full-time staff, four times the permanent workforce of the first phase. During the estimated 14-month construction phase, the project is expected to require roughly 1,200 construction workers on a continuous basis.
Belizaire noted that the $4 billion investment is more than three times Willacy County’s current total asset base of roughly $1.2 billion, a shift he said will translate into substantial long-term support for local schools and county infrastructure through a proposed Chapter 312 tax abatement and Payment in Lieu of Taxes (PILOT) agreement.
"Under our first project, we write a check for $160,000 a year to the county every year as part of our abatement program," Belizaire explained. While the exact PILOT terms for Kati 2 are still being negotiated with Willacy County Commissioners Court, Belizaire said the annual payment is expected to be significantly larger.
Rather than pulling electricity from the regional consumer grid, Soluna’s business model relies on co-locating data centers directly beside renewable power generators that suffer from transmission bottlenecks.
"About half of the power of these power plants never makes it to the grid," Belizaire said, referring to excess wind and solar generation that goes unmonetized. "We go out to wind farms and solar plants that have excess or wasted energy,which happens to be a big problem, and we build data centers right there. We integrate to those, and we use that power to source the computers and technology that we develop."
By converting stranded wind energy from Las Majadas into "intelligence infrastructure," Kati 2 will provide computing capacity for major enterprises, pharmaceutical companies researching new therapies, and energy firms working on sustainable power solutions—bringing high-tech industry to a rural South Texas community rather than traditional data center hubs like Northern Virginia.
Addressing common community concerns surrounding data center resource consumption, Belizaire emphasized that Kati 2 will not draw groundwater or strain local municipal water supplies for daily operations.
During construction, activities such as soil compaction, dust suppression, and concrete mixing will consume the equivalent of roughly 75 homes' annual water usage. Once operational, however, daily facility usage for its 40 employees will drop to the equivalent of about four homes per year.
To cool high-density AI servers, Soluna will utilize direct liquid cooling—a closed-loop system filled with glycol-enhanced water that is trucked in from off-site suppliers and continuously recirculated.
"That water just goes in a loop and stays cool as it takes heat from the chips," Belizaire said. "So no water is coming from the ground or from the community to cool the computers in the building."
Beyond direct payroll, Belizaire said keeping a 24/7 AI facility running requires a local ecosystem of specialized contractors, including electrical, mechanical, networking, security, and maintenance firms.
"You can't fly people in to do those things. They have to be there locally," he said, adding that building a local technology sector gives young Willacy County graduates a reason to build careers close to home instead of leaving the Rio Grande Valley. "An abatement doesn't rob them of that value. The abatement is just the beginning of the creation of that value."
The Oct. 12 open house marked the first in a series of community outreach sessions ahead of Soluna’s formal Chapter 312 application to Willacy County Commissioners Court. The five-stage approval process will include commissioner reviews,public hearings, and a formal comment period.
If approvals proceed on schedule, Soluna aims to break ground in early 2027 and bring Project Kati 2 online by the second quarter of 2028.
Editor's Note: Willacy County residents seeking additional information or wishing to submit feedback on Project Kati 2 should visit solunacomputing.com.
