Data center firm Serverfarm has tied some of its debt to sustainability targets.

The Manulife Investment Management-backed company last week announced the successful implementation of a sustainability-linked loan (SLL) amendment to its $1.637 billion North American credit facility.

This financing framework ties loan pricing directly to the company’s environmental performance. Targets for Serverfarm include improving substantial power efficiency by more than 15 percent by 2033.

“This sustainability-linked loan represents our unwavering commitment to environmental stewardship while delivering the advanced infrastructure that powers the digital economy,” said Avner Papouchado, CEO of Serverfarm. “As we expand our portfolio of AI-ready data centers and hyperscale campuses, we’re proving that sustainable development and technology go hand in hand.”

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.

Serverfarm first secured an upsized $1.637bn credit facility from 19 lenders in December 2024.

TD Securities serves as the Sustainability Structuring Agent and Administrative Agent for the credit facility. The company also led the original credit facility.

Serverfarm, founded in 2009 by real estate development firm Red Sea Group, was acquired by Manulife in 2023. The company operates 10 data centers across North America, Europe, and Israel, totaling more than 1.5 million gross sq ft (139,400 sqm) of data center space and 625MW of IT capacity.

On its website, Serverfarm lists facilities in development across the UK, Israel, Virginia, Georgia, Arkansas, and California.