PORT-OF-SPAIN, Trinidad (AP) — Trinidad and Tobago has signed agreements paving the way for U.S. companies to begin groundwork for installing large data centers in the Caribbean nation, sparking concerns about potential energy consumption and environmental impacts.

The memorandums of understanding with the Florida-headquartered Hummingbird AI Holdings and New York-based Ernst and Young LLP were signed on Friday, according to a statement from the office of Trinidad and Tobago’s Prime Minister Kamla Persad-Bissessar. These are the first such agreements with a Caribbean country.

The deal with Ernst and Young LLP will set out the framework for collaboration on developing large-scale data centers, with the company planning to “partner with third parties in the development” of a 300 megawatt data center, the statement said.

The agreement with Hummingbird AI Holdings sets up the framework for “preliminary cooperation, due diligence and coordination” for a proposed 150 MW AI infrastructure and data center facility.

The deals raised online questions about the environmental impact of the centers.

Renowned social activist Dr. Wayne Kublalsingh told The Associated Press he was concerned about the energy consumption by the planned data centers.

The government is “trying to present something which looks like development, but which is not development,” he said.

Trinidad and Tobago has long grappled with chronic water shortages and intermittent supply, raising concerns that large, water-intensive data centers could place additional strain on an already overstretched system.

Data centers could account for nearly 3% of the world’s projected electricity use by 2030, with 935 trillion watt-hours, according to a recent United Nations University report. The environmental footprint of data centers already rivals some of the world’s largest countries, according to the report.

Trinidad and Tobago’s government signed a third agreement with another American company, Pinnacle Steel and Vanadium Corporation, which recently acquired a local iron and steel plant. Government officials said the agreement allows for further talks on recommissioning operating the plant.

The government said the three initiatives, combined, are expected to generate over 5,000 jobs.

The prime minister of the twin-island republic has been a strong supporter of the Trump administration. Her office said that the U.S. government played a role in facilitating the parties involved in the agreements.

“They’re going to invest here to work on data centers, two for data centers, and one to help us rejuvenate and rebuild our steel industry,” Persad-Bissessar said Friday night, speaking at a U.S. independence anniversary celebration ceremony hosted by the U.S. Embassy in Trinidad and Tobago.

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Anselm Gibbs, The Associated Press