AdaniConneX raises $1.44 billion to construct data centers from eight international banks

AdaniConneX raises $1.44 billion to construct data centers from eight international banks

Over the next three years, Adani Enterprises Ltd., the flagship company of the billionaire Gautam Adani-run conglomerate, plans to spend around USD 1.5 billion in its nascent data center sector.

AdaniConnex, which now only operates one data center in Chennai, has almost two-thirds of the building of its facilities in Noida and Hyderabad finished.

A joint venture between Adani Enterprises and EdgeConneX, AdaniConneX is developing data centers. The business announced on Sunday that it has obtained the biggest sustainability-linked financing arrangement in India, generating up to USD 1.44 billion (about Rs 11,520 crore).

Over the next three years, Adani Enterprises Ltd., the flagship company of the billionaire Gautam Adani-run conglomerate, plans to spend around USD 1.5 billion in its nascent data center sector. In order to provide infrastructure for the rapidly increasing demand for digital services, its joint venture with EdgeConnex intends to construct nine data centers with a combined capacity of one gigawatt by 2030.

The company claimed in a statement that the financing "has an accordion feature to extend commitment up to USD 1.44 billion, with a beginning commitment of USD 875 million." "The transaction elevates AdaniConneX's development financing pool to USD 1.65 billion, building on the maiden construction commitment of USD 213 million executed in June 2023," added the statement.

AdaniConnex, which now only operates one data center in Chennai, has almost two-thirds of the building of its facilities in Noida and Hyderabad finished.

"To minimize their environmental impact and maximize operational efficiency, the next data center buildings will make use of renewable energy sources and cutting-edge technology.

"The sustainability-linked financing reinforces AdaniConneX's commitment towards driving a safety-first lifestyle and culture, delivering world-class Power Usage Effectiveness (PUE) through the implementation of global best practices, and leveraging renewable energy resources," it said.

The facility's creative use of a syndicated guarantee-backed assurance program in line with the project's procurement strategy is one of its standout features.

Eight foreign lenders—ING Bank NV, Intesa Sanpaolo, KfW IPEX, MUFG Bank Ltd., Natixis, Standard Chartered Bank, Societe Generale, as well as Sumitomo Mitsui Banking Corporation—have signed definitive agreements.

Having access to a large liquidity pool supports the company's plan to expedite the deployment of portfolio assets in line with the rapidly increasing demand, according to the statement.

This revolutionary funding strategy is a big step toward creating long-lasting digital infrastructure that will drive economic development and quicken India's digital expansion.

"This successful exercise is a monument to the collective resolve of the parties to meet the challenges of providing sustainable and robust digital infrastructure, thereby pushing norms while setting new industry benchmarks," said AdaniConneX CEO Jeyakumar Janakaraj.

Part of the AdaniConneX capital management strategy includes construction finance, which helps us to provide a data center solution with a strong foundation in sustainability and environmental care. We are excited to set out on this adventure with our renowned global banking partners." Mandated Lead Arrangers were ING Bank NV, Intesa Sanpaolo, KfW IPEX, MUFG Bank Ltd, Natixis, Standard Chartered Bank, Societe Generale, along with Sumitomo Mitsui Banking Corporation.

While Sumitomo Mitsui Banking Corporation, ING Bank NV, and MUFG Bank Ltd served as sustainability coordinators, ING Bank NV and MUFG Bank Ltd served as structuring banks.

The borrower's attorneys were Saraf & Partners and Allen & Overy. Cyril Amarchand Mangaldas as well as Milbank were the lenders' counsels.