APAC data center firm AirTrunk has secured a loan to fund a new project in Singapore.

The company this week announced a new S$2.25 billion (US$1.75bn) green loan in Singapore to support the development of a new hyperscale data center, AirTrunk SGP2. AirTrunk said the transaction was Singapore’s largest-ever loan and green loan for a data center.

The financing begins as a green loan and includes an option to transition into a sustainability-linked loan (SLL). All financial incentives from the loan will be directed to AirTrunk’s social impact fund. Green loans see funds used for green projects, while SLLs see interest repayment rates tied to hitting sustainability targets.

Located in Loyang, SGP2 will provide 70MW of capacity. Timelines for delivery weren’t shared.

AirTrunk founder and CEO, Robin Khuda, said: “This landmark transaction – Singapore’s largest loan and green loan for a data center – strengthens AirTrunk’s leadership in sustainable finance and reflects strong market confidence in AirTrunk’s growth and sustainability strategy.”

Crédit Agricole CIB, DBS Bank, and ING Bank were the Global Coordinators and Sustainability Structuring Agents for this financing structure, leading the development and arrangement in partnership with a consortium of 23 other leading local and international financial institutions.

Amit Sinha, DBS Bank group head of telecommunications, media and technology, Western MNCs, and digital economy, said: “This landmark green loan represents the largest financing for a new data center facility in Singapore to date, underscoring the scale and significance of the project. It comes at a pivotal time as demand for computing power continues to surge across the region.”

Mandated Lead Arrangers and Bookrunners were MUFG Bank, Natixis CIB; Standard Chartered Bank (Singapore), and United Overseas Bank.

Located on 1.5 hectares in Loyang, at the northeast side of Singapore and near the Changi North Cable Landing Station, AirTrunk opened its Singapore data center in 2020. The company says the 78MW facility offers 20,000 sqm of technical space across 18 data halls.

A consortium of AirTrunk and TikTok-owner ByteDance was awarded capacity to develop a new data center in Singapore in 2023 under a pilot scheme by the IMDA and the Singapore Economic Development Board (EDB).

The company, along with Equinix, Microsoft, and GDS/DayOne, was granted a combined 80MW of capacity for new facilities in Singapore as the city-state looks to end a years-long moratorium on new developments.

Crédit Agricole CIB head of telecom finance for Asia-Pacific, Jasmine Zhang, added: “AirTrunk’s SGP2 facility sets a new benchmark for responsible infrastructure development in Asia. Its innovative green loan structure with option to convert into a sustainability-linked loan (SLL) at a later stage reflects a holistic approach to long-term impact, and we are pleased to be part of this journey.”

Sustainability-linked financing is becoming an increasingly popular way for data center firms and telcos to raise funds for projects. With SLLs, companies can secure more favourable interest rates on debt if they achieve certain sustainability targets. With green bonds, companies raise money for select projects that meet pre-agreed sustainability criteria.