US$403.8m for hyperscale campus expansion in Indonesia
Following EdgeConneX’s acquisition of PT Graha Teknologi Nusantara (GTN) last year, the company has secured a windfall of funding for an up to 120MW hyperscale data centre campus in Jakarta, Indonesia’s capital.
The project includes expanding an existing data centre building and the development and construction of additional data halls.
The transaction was advised by international law firm Milbank, with the sustainability-linked loan providing for margin adjustments regarding KPIs concerning the PUE of the data centres, the use of renewable electricity and achieving safety goals are achieved.
‘Bringing sustainable data centre growth to Southeast Asia’
“We are excited to be involved in this project to bring sustainable data centre growth to Southeast Asia,” said James Orme, Partner of Milbank’s Singapore office. “This first-of-its-kind deal marks a new era of financing for these important projects and is an area in which we are seeing increasing amounts of activity.”
Orme explains that with many industries becoming more data intensive and as a result having increased digital infrastructure needs, the demand for data centres has been growing rapidly and Asia and its fast growing populations.
“It is a testament to EdgeConneX and the finance parties that they were able to achieve financial close on one of the first sustainability linked loan facilities for data centres in Indonesia,” he continues. “What the impact is of this, as this is quite a substantial investment and likely has clear benefits. Data centres are very energy intensive and powering these assets with sustainable energy is important as countries look to reduce their carbon footprint. The development of the two data centres by PT Graha Teknologi Nusantara increases data capacity in a city which has an ever-growing digital economy.”
Indonesia up-and-coming data centre location
EdgeConneX’s transaction, Orme continues, is a testament to how Indonesia’s growing population, digital transformation and sustainability push is attracting international investors and operators to help develop and finance data centres and other digital infrastructure transactions.
The Indonesia Data Center Market is expected to reach more than US$2 billion in 2023 and grow at a CAGR of 14.09%, reaching shy of US$4bn by 2028. Despite Indonesia ranking lower in the competitive index compared to other Southeast Asian countries, Modor Intelligence says the potential commercial upside for data centre players is significant in the region due to its growing digital economy coupled with the rapid growth of start-up companies boosting hyperscale data centres.
In light of this, the Indonesian government has announced plans to ease data centre regulations which should result in further growth in this sector and attract further investment.
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