Rapid expansion in data centre financing is redefining Asia Pacific’s loan landscape, with new structures, diverse investors, and increased emphasis on sustainability driving unprecedented growth and complexity in digital infrastructure projects.
The Asia Pacific loan landscape is being recalibrated by a brisk expansion in data centre investment, with lenders and alternative creditors reshaping capital structures to match the scale and complexity of digital infrastructure projects.
According to the Asia Pacific Loan Market Association (APLMA), its new whitepaper, Network effects: How data centre financing is reshaping loan markets in Asia Pacific, maps how the asset class has progressed from a peripheral real estate niche to a central credit consideration in several regional markets. The study, sponsored by Fitch Ratings and law firm Latham & Watkins, says that growing deal sizes and multiplatform portfolios are prompting a shift towards more sophisticated financing techniques and a broader investor base.
Philip Kam, Chief Executive Officer of the APLMA, said: “As data centres become established as critical infrastructure in Asia Pacific, the asset class is quickly becoming an essential part of the APAC loan markets, and we are seeing high demand from APLMA members for insights in this area.” He told members the association will continue research, events and training to deepen market understanding as activity rises.
Industry participants confirm the changing mix of market players. “The rapid growth of data centre financing is bringing new financing structures and new investors into the Asia Pacific credit markets,” said Ben McCarthy, Managing Director & Head of Asia-Pacific, Structured Finance and Covered Bonds at Fitch Ratings. Fitch has also been developing analytical frameworks to assess digital infrastructure credit risks, Sajal Kishore, Managing Director & Head of EMEA and Asia-Pacific, Infrastructure & Project Finance at Fitch Ratings, said: “Fitch has developed credit ratings, analysis and risks assessments to enhance the understanding of digital infrastructure projects. We are pleased to support this initiative to raise awareness of the opportunities and challenges that may lie ahead.”
Market practitioners report that lenders experienced in structured and infrastructure underwriting are increasingly active, with private-credit managers and banks competing to provide bespoke debt solutions. Data from the sector points to a marked rise in securitisation and structured issuance: issuance of data centre asset-backed securities and commercial mortgage-backed securities rose about 80% in 2025 from the prior year, driven by refinancing of construction facilities and term-note maturities, according to market commentary. Major alternative firms are also scaling up regionally; in January 2026 KKR closed roughly US$2.5 billion for privately originated credit strategies in Asia, illustrating appetite for performing credit tied to digital transformation projects.
That diversification is visible across funding forms. The APLMA paper notes expanding use of project finance, asset-backed vehicles, mezzanine loans and holding company-level debt, and anticipates larger platforms turning to capital-markets solutions as they mature. Lenders are responding by tightening documentation and creditor protections; Chuan Wei Kong, Finance Partner at Latham & Watkins, said: “We applaud the APLMA’s efforts to share knowledge and promote best practices in the fast-growing data centre sector. As debt comes in across the capital structure, we are already seeing a sharper focus on collateral and intercreditor agreements.” Don Stokes, Infrastructure Partner at Latham & Watkins, added: “The pace of innovation in financing digital infra build-out in Asia is unprecedented, and we are excited to see how it evolves.”
Despite momentum, the paper stresses regional heterogeneity and regulatory complication. Local rules on data sovereignty, grid access and power usage vary widely and can shift rapidly, increasing underwriting and execution risk. Some jurisdictions lack deep pools of long-dated liquidity for large single-asset exposures, while land tenure, operating licences and cross-border cashflow restrictions complicate security assessments. Project-level underwriting still hinges on site selection, grid connection, construction delivery, customer concentration and lease tenor.
Energy and sustainability are central to financier scrutiny. Developers are adapting design and operations to meet rising regulatory and customer expectations, and sustainability-linked financing is beginning to surface in Asia Pacific. Sumitomo Mitsui Banking Corporation’s USD313.8 million sustainability-linked loan to EdgeConneX for its Jakarta expansion represented the first such SLL for Indonesia’s data-centre market and the lender said the targets align with APLMA SLL principles. The paper links favourable financing terms to stronger sustainability metrics and disclosure, while acknowledging that green and transition finance for the sector remains challenging.
The rapid build-out has also produced concentration and technology risks that draw close attention. Cushman & Wakefield data cited in market reporting projects regional demand growth for data-centre capacity at about 32% per year through 2028, outpacing the US, and the surge associated with AI workloads has generated record-sized loans in markets such as Malaysia. These dynamics amplify concerns around credit concentration, oversupply in certain hubs, and obsolescence pressure from technological change.
Notable transactions illustrate lender confidence and geographic breadth. BDx Data Centers secured project financing from Clifford Capital, UOB and SMBC for its first hyperscale facility in Hong Kong, following earlier loans in Singapore and Indonesia, while SMBC’s EdgeConneX SLL demonstrates the growing intersection of sustainability criteria and infrastructure finance.
APLMA’s membership of more than 400 institutions across banks, non-bank financiers, law firms, insurers, government bodies and rating agencies underpins its drive to build common practices as digital infrastructure lending becomes more integral to APAC loan markets. The association signals further guidance and member engagement as participants adapt to larger, more complex data-centre financings and the evolving risk landscape.
- https://cfotech.co.nz/story/data-centre-boom-reshapes-asia-pacific-loan-markets – Please view link – unable to able to access data
- https://www.pfie.com/pfi-yearbooks/2355122/asia-pacific-awards – The Asia Pacific Loan Market Association (APLMA) has published a whitepaper titled ‘Network effects: How data centre financing is reshaping loan markets in Asia Pacific’, sponsored by Fitch Ratings and Latham & Watkins. The paper examines market structure, regional constraints, and emerging approaches to funding digital infrastructure. It highlights the shift of data centres from a niche segment to a mainstream credit topic in parts of the Asia Pacific, coinciding with a wider search for yield, an expanding private credit footprint, and greater use of structured financing in some markets. The paper presents this expansion as a driver of broader loan market development in the region.
- https://pcwc.theasset.com/article/55774/asia-pacific-private-credit-momentum-continues-in-2026 – In 2025, issuance of data centre asset-backed securities (ABS) and commercial mortgage-backed securities increased by 80% from the previous year, driven by the refinancing of construction loans and approaching term-note maturities. Private equity-backed sponsors led a majority of these transactions. Similarly, rising demand for high-capacity fibre networks is accelerating issuance of fibre network securitisations, Moody’s explains, while leasing and equipment ABS structures are expanding to fund capital-intensive technology hardware, such as servers, routers and graphics processing units. This expansion is particularly pronounced in Asia-Pacific, where private credit markets are deepening rapidly. In January 2026, KKR, for example, completed a US$2.5 billion fundraising for privately originated performing credit investments across the region, including US$1.8 billion in its KKR Asia Credit Opportunities Fund II and US$700 million through separately managed accounts. This follows the firm’s US$1.1 billion inaugural Asia Credit Opportunities Fund closed in 2022. KKR’s initiatives illustrate how global alternative managers are scaling up to meet Asia-Pacific’s growing credit needs, particularly in sectors tied to digital transformation and infrastructure development.
- https://www.straitstimes.com/business/companies-markets/ai-boom-turns-asian-data-centres-into-magnets-for-loan-deals – Artificial intelligence (AI) advances are fuelling a funding frenzy for data centres in Asia, spawning a series of record-breaking loans and filling the pipeline with even more potential deals. In the span of a week, two major Asian data centre operators secured their biggest-ever loans, partly earmarked for the expansion of their operations in Malaysia, which is becoming a hub for these facilities. The deals underscore the industry’s appeal in attracting a range of investors – from banks to real estate players – as the AI boom drives demand. They also show how much of a data centre hotspot Asia has become, with demand set to expand by about 32 per cent a year through 2028, according to data by real estate services firm Cushman and Wakefield, outpacing the US’ expected growth of 18 per cent. The surge in demand for data centre capacity has piqued the interest of an ever-growing diverse pool of capital investors and providers across Asia Pacific.
- https://www2.smbc.co.jp/asia/news-regional/SMBC-closes-sustainability-linked-financing-EdgeConneX-development-data-centres-Indonesia.pdf – Sumitomo Mitsui Banking Corporation (SMBC) has successfully closed a USD 313.8 million sustainability-linked loan (SLL) facility to finance EdgeConneX’s expansion plans for its Jakarta, Indonesia data centre. This landmark SLL financing represents the first-ever in Indonesia’s data centre market, being the inaugural SLL transaction for EdgeConneX in the region and paving the way for increased sustainability capabilities, including power efficiency, renewable energy sources, and enhanced safety measures. These sustainability targets selected for the transaction are consistent with EdgeConneX’s mid- and long-term sustainability strategy and commitments and are aligned to the Asia Pacific Loan Market Association (APLMA) SLL principles.
- https://www.business-standard.com/world-news/ai-advancements-turn-asian-data-centres-into-magnets-for-loan-deals-125032400112_1.html – Artificial intelligence advances are fueling a funding frenzy for data centers in Asia, spawning a series of record-breaking loans and filling the pipeline with even more potential deals. In the span of a week, two major Asian data center operators secured their biggest-ever loans, partly earmarked for the expansion of their operations in Malaysia, which is becoming a hub for these facilities. The deals underscore the industry’s appeal in attracting a range of investors – from banks to real estate players – as the AI boom drives demand. They also show how much of a data center hotspot Asia has become, with demand set to expand by about 32 per cent a year through 2028, according to data by real estate services firm Cushman and Wakefield, outpacing the US’ expected growth of 18 per cent. The surge in demand for data center capacity has piqued the interest of an ever-growing diverse pool of capital investors and providers across Asia Pacific.
- https://aap.com.au/aapreleases/cision20250513ae81955/ – BDx Data Centers, one of the fastest-growing data center operators in the Asia-Pacific, announced the successful closing of project financing in relation to the development of its first dedicated hyperscale data center in Hong Kong. This project financing has been secured from Clifford Capital, UOB, and SMBC. The loan marks BDx’s debut in the Hong Kong market and underscores its access to debt financing across geographies, with strong backing from leading infrastructure lenders in APAC. This loan is BDx’s third project financing facility, after two other loans in Singapore and Indonesia, and demonstrates lenders’ confidence in BDx’s ability to deliver across the various markets it operates in. The financing will be used for the development of, and operating expenses for, BDx’s latest state-of-the-art hyperscale data center, strategically located in Kwai Chung, one of Hong Kong’s most sought-after digital infrastructure zones.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The article was published on 11 March 2026, making it current and timely. No evidence of recycled or outdated content was found.
Quotes check
Score:
8
Notes:
The article includes direct quotes from Philip Kam, CEO of the Asia Pacific Loan Market Association (APLMA), and Ben McCarthy, Managing Director & Head of Asia-Pacific, Structured Finance and Covered Bonds at Fitch Ratings. These quotes appear to be original and have not been found in earlier publications. However, without access to the original sources, full verification is not possible.
Source reliability
Score:
9
Notes:
The article is published on itbrief.asia, a reputable source for technology and business news in the Asia Pacific region. The APLMA, Fitch Ratings, and Latham & Watkins are well-established and credible organizations. The article cites a whitepaper titled ‘Network effects: How data centre financing is reshaping loan markets in Asia Pacific,’ sponsored by Fitch Ratings and Latham & Watkins, indicating a strong foundation of information.
Plausibility check
Score:
9
Notes:
The claims about the rapid growth of data centre financing in the Asia Pacific region and the involvement of major financial institutions are plausible and align with industry trends. The article provides specific figures, such as the 80% rise in issuance of data centre asset-backed securities and commercial mortgage-backed securities in 2025 compared to the previous year, and KKR’s US$2.5 billion closure for privately originated credit strategies in Asia in January 2026. These figures are consistent with known market activities and reports from reputable sources.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents current and plausible information from reputable sources, including direct quotes and specific figures that align with known industry trends. However, the reliance on a whitepaper sponsored by organizations directly involved in the subject matter and the lack of independent third-party verification sources introduce potential biases and uncertainties. While the content is informative and timely, the absence of fully independent verification sources warrants a medium confidence level in the overall assessment.