Technology giant Microsoft announced a new data centre in the Finnish capital on Thursday, with waste heat to be channelled into warming homes and businesses.

In what it touted as the world's largest "waste-heat recycling concept", Microsoft will collaborate with Finnish power company Fortum, whose existing district heating infrastructure includes 900 kilometres (550 miles) of underground pipes that transfer heat to a quarter of a million homes in the greater Helsinki region.

"The location for the data centre region was chosen specifically with waste heat recycling in mind," the companies said in a statement, adding that the scheme will cut annual CO2 emissions by 400,000 tonnes.

Fortum's CEO and President Markus Rauramo called the project "a significant step for a cleaner world, made possible by our joint ambition to mitigate climate change".

Pekka Isosomppi, Microsoft's head of communications in Finland, told AFP construction of the data centre will commence "as soon as possible" once required permits are in place.

He did not disclose the project cost but said it will be "the largest single ICT (internet and communication technology) investment in Finland to date".

Around 45 percent of Finnish homes are warmed through district heating systems, which transfer heat by pumping water through insulated pipes. The share of waste heat used to power the systems is on the rise as companies look for more sustainable energy sources.

Heat from the centre will account for about 40 percent of district heating in the Espoo, Kauniainen and Kirkkonummi regions of the capital, Fortum said.

Finland's leaders have long sought to market the Nordic country as a prime location for data centres, citing the cost benefits of the cold climate, comparatively low energy prices and fast connections, as well as the sustainability opportunities of the district heating infrastructure.

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