AirTrunk's Record A$4.6B Sustainability Linked Loan

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by KnowESG
KnowESG_AirTrunk's Record A$4.6B Sustainability Linked Loan
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AirTrunk, a specialist in hyperscale data centres in the Asia-Pacific & Japan (APJ) region, has revealed its substantial accomplishment of increasing its corporate sustainability linked loan (SLL) to A$4.6 billion.

This remarkable feat is more than twice the initial A$2.1 billion SLL secured in September 2021. The primary purpose of this transaction is twofold: to refinance the existing debt facilities of AirTrunk and provide financial support for the company's rapid expansion across the region. It is noteworthy that this refinancing does not encompass the existing A$1.2 billion in sustainable financing in Japan.

The SLL introduced by AirTrunk has proven to be a trailblazing example in the realm of sustainable financing. It now stands as the largest SLL ever established for a data centre operator globally. This achievement is attributed to the implementation of innovative and pioneering key performance indicators (KPIs).

AirTrunk's SLL is a strategic linkage between the company's financial endeavours and its robust commitments to both environmental and social causes. The KPIs integrated into this SLL encompass a range of critical aspects, including carbon usage effectiveness (CUE), operating power usage effectiveness (PUE), operating water usage effectiveness (WUE), as well as gender diversity and gender pay equity.

A notable distinction of this SLL lies in its utilisation of a CUE metric, which makes it the first SLL to amalgamate CUE, WUE, and PUE. This integration ensures an unparalleled level of transparency and accountability in environmental matters for a data centre operator.

Moreover, the SLL marks a groundbreaking initiative as the first publicised financing venture by a data centre company to incorporate a gender pay equity target. This integration underscores AirTrunk's steadfast commitment to fostering diversity, equity, and inclusion.

AirTrunk's progressive strategy is highlighted by its intention to direct all margin incentives from the SLL towards impactful social initiatives aligned with four core domains: Equal Digital Access, STEM Education, Biodiversity and Conservation, and Innovation and Research & Development.

Notably, AirTrunk was the first corporate entity to announce plans to invest margin incentives into social impact initiatives as part of its A$650 million TOK1 SLL in Japan earlier in the year. Further details about AirTrunk's comprehensive social impact programme are set to be unveiled shortly.

Prashant Murthy, Chief Financial and Commercial Officer of AirTrunk, accentuated, "Over the past two years, we have unveiled plans for developing over half a gigawatt of new capacity in APJ. This landmark SLL guarantees that our regional scaling is intrinsically sustainable, propelling the industry forward by redefining standards in sustainable financing."

He added, "Our innovative combination of KPIs centred on pivotal environmental aspects in the industry, spanning carbon emissions, energy and water efficiency, alongside gender diversity and equity, underscores our commitment to responsible and sustainable expansion. These SLL KPIs harmonise seamlessly with our Net Zero by 2030 strategy, reinforcing our dedication to meeting our climate objectives."

In closing, Prashant emphasised, "Our journey of innovation encompasses collaboration with customers, employees, investors, financing partners, regulatory bodies, and communities to drive such advancements towards a sustainable future."

Since the inception of its initial corporate SLL in September 2021, AirTrunk has introduced four new ambitious projects. These encompass the 320+ megawatt (MW) SYD3 in Western Sydney, the 110+MW TOK2 in Tokyo West, the 150+MW JHB1 in Johor Bahru, Malaysia, and the 15+MW HKG2 in Hong Kong.

Notably, the 300+MW TOK1 data centre in Tokyo East has also been inaugurated. Collectively, AirTrunk's APJ data centre platform provides an impressive nearly 1.38GW of capacity, experiencing rapid expansion to address the soaring demand for public cloud and artificial intelligence (AI) platforms.

AirTrunk has remarkably raised over A$6 billion in Environmental, Social, and Governance (ESG) financing throughout its APJ platform. This achievement solidifies its position as one of the most substantial contributors of sustainable financing in the data centre domain. This financing commitment includes the aforementioned Japan SLL as well as the TOK2 green loan offered by the company.

The successful SLL refinance was facilitated by esteemed financial institutions, including Crédit Agricole CIB, Deutsche Bank, and HSBC, which collectively acted as joint Sustainability Structuring Agents. Additionally, these institutions, alongside DBS, ING, Morgan Stanley, and MUFG, assumed roles as mandated lead arrangers, underwriters, and bookrunners (MLAUBs) for the loan.

Key representatives from the Sustainability Structuring Agents shared their perspectives:

Antoine Rose, Head of Sustainable Investment Banking, Asia-Pacific and the Middle East at Crédit Agricole CIB, hailed the transaction as a milestone that reinforces AirTrunk's commitment to sustainability and positions it as a global leader in the data centre sector.

Kalpana Seethepalli, Director of ESG, APAC at Deutsche Bank, commended AirTrunk for pushing the boundaries of sustainability in the data centre industry, underscoring the company's commitment to innovation and transparency.

Amanda Taylor, Managing Director, Head of Large Corporates and Sustainable Finance, HSBC Australia, lauded AirTrunk's commitment to sustainability and innovation, emphasising the significance of gender-based KPIs in driving progress.

For comprehensive details about AirTrunk's strides in sustainable financing, please visit https://airtrunk.com/sustainability/sustainable-finance/.

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Source: AirTrunk

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