Case study: USD280 mn green loan for AI-ready data centre

The rapid growth of artificial intelligence (AI) and Machine Learning (ML) technologies are demanding more efficient data centre design.

September 19, 2024

2 mins

Corporate & investment bankingFinancial marketsIndustries in transition

Background

The rapid growth of artificial intelligence (AI) and Machine Learning (ML) technologies are demanding more efficient data centre design. AI ready data centres not only have to house  larger amounts of data and computational power than traditional data centres but they also require more space, energy and water for cooling.  Malaysia is emerging as a data centre powerhouse in Southeast Asia, with most of the development taking place in Johor Bahru.

A significant contribution to the state’s digital infrastructure is the Princeton Digital Group’s (PDG) 150MW JH1 campus, which is also supposed to be one of Southeast Asia’s largest data centre facilities. Located in Sedenak Tech Park (STeP), PDG’s JH1 campus integrates sustainable technologies and next-generation design, including solar panels on the rooftop to generate renewable energy. When operational, it will cater to global hyperscalers and enterprises with intensive computational needs, representing a major milestone in reducing resource consumption to combat climate change.

PDG is financing the first phase of development with a USD280 million green loan, which is also the company’s first Green Loan aligned to their own Green Finance Framework. Standard Chartered is playing a dual role because of our growing capabilities in Project & Export Finance and Sustainable Finance in Asia and the world.

Standard Chartered’s role

We are Mandated Lead Arranger, and Green Loan Coordinator of the syndicated financing, and also helped PDG develop their Green Finance Framework and obtain a credible Second Party Opinion.

Deal structure

The financing is structured as a five-year term loan, with a revolving credit facility and customised sponsor support, ensuring that the offtaker risk is further credit enhanced. The Project will also benefit from a fully contracted 10-year master service agreement with one of the largest Chinese hyper scalers in the social media and technology industry.