EdgeConneX issues $1.7 billion in sustainable loans to fund growth

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An example of a hyperscale data center developed by EdgeConneX. (Image: EdgeConneX)





























































































































































































































EdgeConneX has lined up $1.7 billion in sustainability-related loans, which the company says will “significantly improve” its credit profile and strengthen its focus on environmental stewardship. The funding also provides EdgeConneX with the capital needed to pursue 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 support the company’s global growth. In an asset-backed securitization, a sponsor uses equity and cash flow from a pool of properties to secure a loan. Since builders have data centers in various stages of development, some of these assets may qualify for a lower interest rate than the entire portfolio.

“The asset-backed securities quality rating demonstrates the financial strength of EdgeConneX and confirms the confidence and quality of the EdgeConneX business model,” said Joe Harar, Chief Financial Officer of EdgeConneX. “This new funding provides the company with great flexibility to not only invest in our core infrastructure with sustainability in mind, but also to support our high-growth customers who need green and sustainability-related solutions in a hyper-sustainable way. -local and large-scale globally.”

Greening infrastructure from edge to cloud

The EdgeConneX platform started with a network of edge data centers in second-tier cities, and is now expanding to hyperscale campuses in major markets in the US, Europe and Asia. The company’s expansion was supported by EQT Infrastructure, the global fund that acquired EdgeConneX in 2020.

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

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

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

A Sustainability Linked Loan (SLL) is a debt instrument that secures a company’s overall ESG performance through sustainability performance targets agreed by the company and its investors. In recent years, a series of data center providers have adopted sustainable financing strategies by issuing green bonds or SLLs, including Aligned, Flexential, Vantage Data Centers, Digital Realty and Equinix.

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