EdgeConneX Lines up $1.7 Billion in Sustainable Loans to Fund Growth

June 21, 2022
EdgeConneX has lined up $1.7 billion in sustainability-linked loans, which the company says will “dramatically improve” its credit profile, burnish its focus on environmental stewardship, and provide capital to continue the global expansion of its data center footprint.

EdgeConneX has lined up $1.7 billion in sustainability-linked loans, which the company says will “dramatically improve” its credit profile and burnish its focus on environmental stewardship. The funding also provides EdgeConneX with the capital to continue a global expansion that has seen the company enter new markets in China, India and Indonesia in recent months.

The financings include the first use of asset-backed securitization (ABS) for EdgeConneX, as well as a multi-currency term loan to further the company’s global growth. In an asset-backed securitization, a developer uses the equity and cash flow from a pool of properties to secure a loan. Because builders have data centers in various stages of development, some of these assets can qualify for a lower interest rate than the entire portfolio.

“The investment-grade rating for the asset-backed securities demonstrates the financial strength of EdgeConneX and confirms the confidence and quality of the EdgeConneX edge business model,” said Joe Harar, CFO at EdgeConneX. “This new financing affords the company high flexibility to not only invest in our core infrastructure in a sustainability-minded way but also to support our high growth customers that need green, sustainability-linked solutions hyper-locally and at hyperscale globally.”

Greening Infrastructure from Edge to Cloud

The EdgeConneX platform began with a network of edge data centers in second-tier cities, and now extends to hyperscale campuses in major markets across the U.S., Europe and Asia. The company’s expansion has been supported by EQT Infrastructure, the global fund which acquired EdgeConneX in 2020.

As a result, EdgeConneX already had an investment-grade credit profile, with is accompanied by lower interest rates. The new loans will lower the company’s cost of capital even further, while allowing EdgeConneX to deploy more data center capacity in both new and existing markets.

The sustainability-linked financing furthers the company’s focus on reducing environmental impact across its global footprint. EdgeConneX says its goal is to be a carbon-, waste- and water-neutral data center provider by 2030 and operate a data center platform powered by 100% renewable energy.

Recent headlines have brought climate risk to the fore, prompting customers to focus on eliminating fossil fuels from their IT footprint. This coincides with growing interest in sustainable finance, as investors seek to align their portfolios with climate resilience. In our 2021 forecast, Data Center Frontier highlighted sustainable financing as one of the eight trends that would shape the digital infrastructure industry

A sustainability-linked loan (SLL) is a debt instrument that ensure a company’s overall ESG performance through sustainable performance targets agreed upon by the company and its investors. Over the past several years, a series of data center providers have adopted sustainable finance strategies by issuing either green bonds or SLLs, including Aligned, Flexential, Vantage Data Centers, Digital Realty and Equinix.

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

Sponsored Recommendations

Optimizing AI Infrastructure: The Critical Role of Liquid Cooling

In this executive brief, we discuss the growing need for liquid cooling in data centers due to the increasing power demands of AI and high-performance computing. Discover how ...

AI-Driven Data Centers: Revolutionizing Decarbonization Strategies

AI hype has put data centers in the spotlight, sparking concerns over energy use—but they’re also key to a greener future. With renewable power and cutting-edge cooling, data ...

Bending the Energy Curve: Decoupling Digitalization Trends from Data Center Energy Growth

After a decade of stability, data center energy consumption is now set to surge—but can we change the trajectory? Discover how small efficiency gains could cut energy growth by...

AI Reference Designs to Enable Adoption: A Collaboration Between Schneider Electric and NVIDIA

Traditional data center power, cooling, and racks aren’t sufficient for GPU-based servers arranged in high-density AI clusters...

Courtesy of Stream Data Centers
Image courtesy of Stream Data Centers

The Rise of the “Fake” Data Center Developer — And How to Tell the Difference

Stream Data Centers’ Co-Managing Partners expand on the problem of “fake” data center developers and explain how investors and end users can separate the wheat from the chaff....

White Papers

Get the full report.

From Console to Cloud

April 7, 2022
This white paper from Iron Mountain explores the current challenges, drivers, and opportunities for gaming digital infrastructure.