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Sustainable funding secured for data centre conversion

3rd August 2023

ESR Group has secured the first sustainability-linked loan (SLL) in Hong Kong for a brownfield data centre project.

The HK$1.6 billion ($200 million) facility will be used to fund the conversion of a building in Kwai Chung, Hong Kong into a 21.3MW data centre.

The five-year secured, committed facility has a tiered incentive mechanism where ESR will be entitled to an interest reduction when the project’s sustainability targets are achieved. ESR is targeting data centre tenants with strong sustainability credentials.

Electricity company CLP Power is advising ESR on the key performance indicators for the loan. These include features such as a diesel generator-free construction site and a green wall in the façade.

Crédit Agricole CIB acted as the sole sustainability advisor and coordinating bank, while SMBC and UOB acted as sustainability agents. All three lenders were also mandated lead arrangers.

Asia Pacific real estate investment manager ESR has now closed seven SLLs, totalling $4 billion.

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