Blackstone Inc., through its data center firm AirTrunk, is reportedly marketing a US$2.3 billion loan to finance data center projects in Malaysia. The move reflects an aggressive increase in technology investment in Southeast Asia driven by the artificial intelligence (AI) boom.
The funds will be used to support the development of the 200-megawatt AirTrunk JHB2 data center facility located in Johor. The large-scale project is seen as part of efforts to strengthen the region’s digital infrastructure as demand for AI and cloud computing capacity continues to grow.
Several major financial institutions are reportedly involved in the financing deal, including DBS Group Holdings Ltd., Crédit Agricole S.A., ING Bank N.V. and United Overseas Bank Limited. The loan has a three-year maturity and is currently being syndicated to the broader market.
High demand for AI technology has led data center operators to increase debt to accelerate expansion of operations.
Moody’s Ratings expects at least US$3 trillion to flow into the data center sector over the next five years, with the majority of financing expected to come from debt markets.
However, there are also concerns among investors about the sector’s ability to deliver sustainable returns in the long term given rising development costs and energy consumption.
The mega-financing trend for data centers is now becoming more evident in the Southeast Asia region. Digital Edge and B.Grimm Power Public Company Limited recently announced an US$880 million financing facility for a data center project in Thailand, while Bain Capital’s Bridge Data Centers is also reportedly in talks to raise up to US$6 billion for operational expansion.
In Malaysia, Singapore-based DayOne Data Centers Ltd. is looking to increase the size of its existing loan to up to US$7 billion to support its data center expansion plans.
The AirTrunk loan reportedly offers an interest margin of 225 basis points above the Secured Overnight Financing Rate for offshore financing and 235 basis points for domestic financing.
In addition, the Sydney-based company also plans to raise at least A$500 million through asset-backed bonds to further expand its data center operations in the region.
