AdaniConneX Lands $1.44 Billion Construction Financing Deal

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The largest sustainability-linked financing in India, AdaniConneX, is a 50:50 joint venture between Adani Enterprises and EdgeConneX with the potential to raise up to USD 1.44 billion. With an accordion mechanism to extend commitment up to USD 1.44 billion, the financing has an initial commitment of USD 875 million. Building on the initial construction facility of USD 213 million completed in June 2023, the deal increases AdaniConneX’s construction finance pool to USD 1.65 billion.

Earlier this month, it was announced that billionaire Gautam Adani’s main company, Adani Enterprises (AEL), is actively looking to grow its data center industry. Over half of the $5 billion that AdaniConneX, an equal joint venture between AEL and Sweden’s EQT-owned EdgeConneX, plans to invest over the next five years might be invested this year alone.

AdaniConneX has achieved a significant turning point with this funding, demonstrating its dedication to environmentally conscious business methods. Modern data centres that make use of cutting-edge technology and sustainable energy sources will be built with the help of money. This strategy will maximise operational effectiveness while reducing the facilities’ environmental impact. By putting sustainability first, AdaniConneX is assuring long-term viability and responsible growth for its business and setting a good example for the Indian data center industry. While the critics argue that Adani monopoly is being established in different sectors, the fact remains that the Group is trying its best to boost different sectors of the Indian economy.

Maximising Operational Effectiveness

Modern technology and renewable energy sources will be used in the soon-to-be data center facilities to minimise environmental impact and maximise operational effectiveness. AdaniConneX’s dedication to promoting a culture of safety, achieving world-class Power Usage Effectiveness (PUE) through the adoption of international best practices, and utilising renewable energy resources is further strengthened by the financing connected to sustainability.

This financing demonstrates AdaniConneX’s unrelenting dedication to environmental responsibility. The construction of the data centers will prioritise reducing water consumption and implementing cutting-edge cooling techniques. AdaniConneX also intends to prove its dedication to sustainable methods further by obtaining certifications such as LEED (Leadership in Energy and Environmental Design), which are considered industry leaders. AdaniConneX has positioned itself as a leader in the Indian data centre market thanks to its comprehensive approach to green data centre development, which draws in clients who value the environment and are looking for dependable and sustainable data centre solutions. This doesn’t suggest Adani monopoly however in the data center domain.

Long-Lasting Digital Infrastructure

One of its standout features is the facility’s creative use of a syndicated guarantee-backed assurance program that aligns with the project’s procurement strategy. Eight foreign lenders—ING Bank N.V., Intesa Sanpaolo, KfW IPEX, MUFG Bank Ltd., Natixis, Standard Chartered Bank, Société Générale, and Sumitomo Mitsui Banking Corporation—have signed definitive agreements. The involvement of such a broad coalition of well-known lenders demonstrates their faith in AdaniConneX’s potential and vision. This powerful support would further cement the company’s standing as a major participant in India’s data center revolution.

Having access to a large liquidity pool supports the company’s plan to deploy portfolio assets in line with rising demand quickly. This revolutionary funding strategy is a big step toward creating a long-lasting digital infrastructure that will drive economic development and quicken India’s digital expansion. This creative financing approach attracts much-needed finance and encourages eco-friendly practices, setting a precedent for data center projects in India to come. It opens the door for the nation’s digital infrastructure ecosystem to become more resilient and sustainable.

CEO’s Vision

“Construction financing is a core element of the AdaniConneX capital management plan, enabling us to deliver a data center solution firmly rooted in sustainability and environmental stewardship,” said Mr. Jeyakumar Janakaraj, CEO of AdaniConneX. “This successful exercise is a testament to the collective resolve of the parties to meet the challenges of establishing sustainable and robust digital infrastructure, thereby pushing norms and setting new industry benchmarks.” We are excited to set out on this adventure with our renowned global banking partners.

Mandated Lead Arrangers included ING Bank N.V., Intesa Sanpaolo, KfW IPEX, MUFG Bank Ltd., Natixis, Standard Chartered Bank, Société Générale, and Sumitomo Mitsui Banking Corporation. While Sumitomo Mitsui Banking Corporation, ING Bank N.V., and MUFG Bank Ltd. served as Sustainability Co-ordinators, ING Bank N.V. and MUFG Bank Ltd. served as Structuring Banks. The involvement of this esteemed group of financial institutions highlights the potency and reliability of AdaniConneX’s financing approach that is tied to sustainability. Their experience will be crucial to guaranteeing the project’s effective completion.

The borrower’s attorneys were Saraf & Partners and Allen & Overy. Cyril Amarchand Mangaldas and Milbank served as the lenders’ legal counsel. The involvement of eminent law firms such as Saraf & Partners, Cyril Amarchand Mangaldas, Allen & Overy, and Milbank further highlights the importance of this deal. Their extensive knowledge of the Indian and global financial landscapes and combined experience guarantee a seamless and effective execution process.

Conclusion

With the signing of a historic $1.44 billion funding agreement, AdaniConneX has demonstrated its dedication to developing sustainable data centres in India. This funding highlights their commitment to environmentally friendly practices while also supporting their construction goals. AdaniConneX strives to provide the highest operational efficiency while minimising its data centres’ environmental effects through innovative technology, renewable energy sources, and water-saving techniques. With the support of prominent financial institutions and legal counsel, AdaniConneX is positioned as a leader in developing a strong and sustainable digital infrastructure for India’s rapidly expanding digital market thanks to its creative approach. Whether we call it Adani monopoly or Adani leadership, how the firm is progressing in our country is phenomenal.