AirTrunk links 100% of its A$5 billion financing platforms to ESG

Follows announcement of first sustainability linked loan (SLL) for a data centre in Japan. SLL margin incentives to be invested into social initiatives

Asia-Pacific & Japan (APJ) hyperscale data centre specialist, AirTrunk, has linked 100 per cent of its debt funding platforms to sustainability commitments following the raising of a ~A$650 million Sustainability Linked Loan (SLL) in Japan. Across its financing platforms, AirTrunk has raised A$5 billion in Environmental, Social and Governance (ESG) financing, making the company one of the largest issuers of sustainable financing in the data centre industry globally.

The incremental Japan SLL will finance a major expansion of AirTrunk TOK1 (TOK1) and is the first SLL for a data centre in Japan, and the first in APJ to combine operating energy and water efficiency as Key Performance Indicators (KPIs).

Energy and water are critical and interdependent resources that impact a data centre’s environmental footprint. As part of its commitment to accountability and transparency, AirTrunk continues to focus its financing KPIs on actual energy usage through operating power usage effectiveness (PUE) as opposed to design PUE.

AirTrunk plans to invest any margin incentives from the Japan SLL into social impact initiatives within Japan. Plans are underway to expand the program across APJ to support long term initiatives aligned to AirTrunk’s purpose of scaling and sustaining the region’s digital future. This will include supporting initiatives across four focus areas: Equal Digital Access, STEM Education, Biodiversity and Conservation, and Innovation and Research & Development.

The new SLL follows AirTrunk’s previously announced sustainable financing including the TOK2 green loan in September 2022 which was the first for a data centre in Japan, and the inaugural A$2.1 billion corporate SLL announced in September 2021, which set several industry benchmarks including being the largest globally at the time, the first for a data centre in APJ and the first to utilise operating PUE as a KPI.

AirTrunk Chief Financial Officer, Prashant Murthy said: “By driving innovation in sustainable financing and creating a lasting impact in our communities, we are committed to powering positive industry change.

“We have now linked all our debt platforms to sustainability commitments, more than doubling our sustainable financing since our inaugural SLL launched in 2021. Our sustainable finance platform complements our recent commitment to net zero emissions by 2030.”

As demand for hyperscale digital infrastructure in Japan increases, AirTrunk is expanding its flagship Japan data centre, TOK1 located in Inzai, Chiba prefecture near Tokyo. The expansion includes the development of a 55MW building, as part of the broader 300+MW campus, to service a large new technology customer.

AirTrunk Head of Japan, Nori Matsushita said: “Today’s announcement marks another major milestone for AirTrunk as we continue to sustainably enable Japan’s digitalisation through the sustainable financing, design, build and operations of our data centres.”

Deutsche BankCredit Agricole CIB and MUFG Bank acted as joint sustainability structuring agents on the TOK1 SLL.

Additional quotes from financing partners:

Deutsche Bank Head of ESG for Asia Pacific, Kamran Khan said: “AirTrunk continues to set global standards for sustainability in the data centre industry. The use of credible KPIs and globally recognised benchmarks for ambitious, price-linked energy and water efficiency targets in data centre operations is critical at a time when the global economy is digitising at an exponential rate.”

Crédit Agricole CIB Head of Sustainable Investment Banking, Asia-Pacific and the Middle East, Antoine Rose said: “As a leading global bank in sustainable finance, Crédit Agricole CIB is proud to support AirTrunk as the Sustainability Structuring Agent. This transaction underlines AirTrunk’s strong sustainability commitment and ambition to adopt best-in-class environmental management practices. Following the company’s green loan in 2022 and SLL in 2021, this is our third consecutive collaboration with AirTrunk, as part of our continuous effort to promote innovation and development of sustainable financing in the data centre industry.”

MUFG Bank, Ltd. Managing Director, Head of Sustainable Business Division, Daisuke Nishiyama said: “We are proud to be working with AirTrunk again to execute their first Sustainability-Linked Loan (SLL) for a data centre in Japan. This SLL is our second collaboration with AirTrunk following the green loan executed in September 2022, and we are delighted to contribute to establishing a new sustainable financing benchmark for the data centre industry in Japan.”