The Asian Infrastructure Investment Bank (AIIB) has committed to invest $150 million in the development of data centres that mostly serve emerging Asia through the Keppel Data Centre Fund II (KDFC-II), a closed-end private equity vehicle managed by Alpha Investment Partners Limited (Alpha).
This is AIIB’s first data centre project. Multilateral development banks have been investing in digital infrastructure in the past, but such investments are becoming more essential nowadays with the improvement of 5G technology and other high-speed/supercomputing digital infrastructure due to the pandemic.
AIIB’s investment of $100 million through a parallel fund structure and $50 million through c0-investments mark the final close of KDFC-II, a development fund making strategic investments in the fast-growing data centre sector with a focus on the Asia Pacific.
Many low and mid-income countries lack their own domestic data infrastructure, and the disparities in data centre penetration among countries with different levels are wide. This reflects shortcomings in the investment climate where major global investors have largely shunned investing in projects that will enhance capital mobilization to develop data centres serving emerging Asia.
“The digitalization megatrend 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 underscoring the significance of data centres which are essential components of the digital ecosystem ad 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 centres that mostly serve Emerging Asia,” said AIIB Director General, Banking Department (Region-1), Dongik Lee.
Alpha CEO Alvin Mah added that data centres form the foundation of the digital economy which underpins almost every aspect of modern life today. AIIB will conduct a prior review of investments presenting significant environmental and social (ES) risks like involuntary resettlement, adverse impacts on Indigenous Peoples, environment, community health and safety.
AIIB's USD150 million commitment to the Keppel Data Centre Fund II will support the development of #datacenters that mostly serve emerging 🌏Asia.
— AIIB (@AIIB_Official) January 21, 2022