The Asian Infrastructure Investment Bank (AIIB) has committed USD150 million to invest in the development of data centers that mostly serve emerging Asia through the Keppel Data Centre Fund II (KDCF II), a closed-end private equity vehicle managed by Alpha Investment Partners Limited (Alpha).
This is AIIB’s first data center project. Multilateral development banks have been investing in digital infrastructure in the past, but such investments are becoming more essential nowadays with the acceleration of 5G technology and other high-speed/supercomputing digital infrastructure due to the pandemic.
AIIB’s investment of USD100 million through a parallel fund structure and USD50 million through co-investments mark the final close of KDCF II, a development fund making strategic investments in the fast-growing data center sector with a focus on Asia Pacific.
Many low- and mid-income countries lack their own domestic data infrastructure, and the disparities in data center penetration among countries with different income levels are wide. This reflects shortcomings in the investment climate where major global investors have largely shunned investing in emerging and frontier economies. This project will enhance capital mobilization to develop data centers serving emerging Asia.
“The digitalization mega trend is re-shaping global markets and business operations,” said AIIB Director General, Banking Department (Region 1), Dongik Lee. “This trend has been accelerated by the COVID-19 pandemic, further highlighting the importance of data centers which are essential components of the digital ecosystem and attractive investment targets, as identified by AIIB’s Digital Infrastructure Sector Strategy. Our partnership with KDC Fund II and Alpha will foster the development and enhancement of hard digital infrastructure to bridge the digital divide by mainly investing in colocation data centers that mostly serve Emerging Asia.”
Alpha CEO Alvin Mah added that data centers form the foundation of the digital economy which underpins almost every aspect of modern life today.
“We are pleased to welcome AIIB as an investor and look forward to strengthening our partnership through the Keppel Data Centre Fund II, which is seizing opportunities arising from the burgeoning demand for quality data centers,” said Mah. “Working together with Keppel Data Centres, we are able to tap on the Keppel Group’s know-how in data center operations excellence, sustainable technology and energy efficiency to develop better and greener data centers, which is an increasing imperative for data center operators. This will allow us to set our portfolio above the others to offer a wider range of services to clients and more compelling returns to investors.”
The project is aligned with AIIB’s thematic priorities of Connectivity and Regional Cooperation, Green Infrastructure and Private Capital Mobilization. It will also support Alpha in developing climate finance monitoring indicators, incorporating the joint MDB methodology for tracking climate finance and an Environmental and Social Management System at the Fund level. This partnership benefits AIIB’s geographical diversification given the diverse pipeline covering Southeast Asia and East Asia, among other regions across Asia Pacific.
Additional information about the Multicountry: Data Center Development in Emerging Asia project can be found here.
About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 105 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Working with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
About Keppel Capital
Keppel Capital is a premier asset manager in Asia. It is the asset management arm of Keppel Corporation, one of Singapore’s flagship multinational companies with a global footprint in more than 20 countries. Keppel Corporation provides solutions for sustainable urbanisation, focusing on energy & environment, urban development, connectivity and asset management.
With assets under management of approximately S$37 billion as at end-2020, Keppel Capital has a diversified portfolio that includes real estate, infrastructure and data centre assets in key global markets.
Keppel Capital aims to create value and deliver sustainable returns for institutional and retail investors through a range of products including listed REITs, business trusts, private funds, separate accounts and pooled investment vehicles.
