AirTrunk has closed on a green loan to fund the development of a data center in Tokyo, Japan.
The company this week announced the successful close of a green loan in Japan under its Green Financing Framework. It did not disclose the size of the loan.
The green loan will finance AirTrunk’s previously-announced 110MW West Tokyo data center, AirTrunk TOK2; the company said this will be the first green loan for a data center in Japan.
AirTrunk Chief Financial Officer, Prashant Murthy said: “We continue to drive sustainable innovation throughout the design, build, operations, and financing of our data centers. The green loan closed today has set several industry benchmarks including being the first for a data center in Japan, and first to use eligibility criteria based on operating PUE and water productivity.”
Announced in May 2022, TOK2 will be built across more than 4.6 hectares (11.36 acres) to serve a major cloud provider. The company has one existing Tokyo data center, known as TOK1, in the east of the region. The first 30MW phase of that campus opened in November 2021.
Under the green finance framework, AirTrunk’s green projects must meet certain eligibility criteria which have a positive impact on the environment, in order to be financed through green loans. The company has defined three categories as ‘green loan’ eligible – Green Data Center, Renewable Energy, and Water Efficiency.
The joint Sustainability Structuring Agents for the innovative framework and green loan were Credit Agricole CIB, who also advised on the SLL, and MUFG Bank. Global leader in ESG research and analysis, Sustainalytics, provided independent verification via Second Party Opinion of the Framework.
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AirTrunk has been making moves toward tying its financing to sustainability goals. In September 2021, the Australian firm converted its existing corporate loan facility of more than AU$2.1 billion (US$1.545bn) into a Sustainability Linked Loan (SLL). If the company hits certain ESG goals, it will see reduced interest payments on its debts.
Daisuke Nishiyama, Managing Director, Head of Sustainable Business Division, MUFG Bank, Ltd. said: “We are proud to be partnering with AirTrunk to execute the first green loan in the data center sector in Japan, and drive innovation in the sustainable finance market. This green loan is in line with AirTrunk’s ambitious and first-of-its-kind Green Financing Framework, and we are pleased to have played a part as a sustainability structuring agent in the development of this sector-leading framework. We look forward to our continued partnership and collaboration with AirTrunk.”
Antoine Rose – Head of Sustainable Banking, Asia-Pacific and the Middle East at Crédit Agricole CIB, added: “Crédit Agricole CIB is very proud to accompany AirTrunk as Sustainability Structuring Agents for this data center financing, this is our second collaboration in a row after successfully closing AirTrunk’s inaugural Sustainability-Linked Loan last year. AirTrunk continues to strengthen its footprint in sustainable finance by launching its Green Financing Framework confirming its sustainability ambition and supporting high standards for this sector.”
Whether general-purpose sustainability-linked loans or project-specific green bonds, sustainability-linked financing is quickly becoming a common trend amongst data center and telco firms. The likes of Equinix, Verizon, Aligned, Telefónica, NTT, KPN, Baidu, Atos, Digital Realty, Flexential, and Nabiax have all raised new green-tied funds or converted existing debt to include interest rates tied to sustainability and ESG goals.
