all
Siemens Financial Insight Center
Emerging trends, original points of view and cutting edge research on how financial services is leading change in today's diverse and digitally driven markets.
Supporting data center boom with project financing
Siemens Financial Services provides financing solutions that make a difference for data centers
NOVEMBER 2022
There’s no end in sight for the ongoing proliferation of data centers. Statista, for example, forecasts continuous investment in data center technology with total global revenue from data centers to surpass USD 400 billion by 2027. That’s because, as the home of the cloud and the place where data is stored and processed, they are increasingly becoming critical infrastructure for organizations in the digital age. As more and more services move online, businesses rely on data centers for higher performance and lower latency times.
Much debt has already been raised for data center transactions, with EUR 56 billion raised between 2016 and 2022 (as of October) according to Infralogic, which will largely come due for refinancing over the coming years. Funding the continued growth of data centers requires further bank debt and financing solutions that are tailored to the specific needs that come with such a project. By leveraging its deep technical expertise and working closely with its customers, this is precisely what Siemens Financial Services (SFS), the financing arm of Siemens, offers to bring their ambitions to life.
One example of financing in this area is the company’s collaboration with Vantage Data Centers, a leading global provider and operator of hyperscale data center campuses. Recently, SFS has been involved in the financing of a 16 MW greenfield data center that Vantage Data Centers will be opening in Offenbach am Main, Germany. Construction of the facility has already begun and is expected to be completed by 2026. Once operational, the facility will provide important infrastructure for the growing demand for cloud services in the Rhein-Main region, and the waste heat it generates will be made available to a local energy provider, ensuring that it is being put to good use.
This project builds on a strong existing relationship between Siemens and Vantage: When Vantage entered the EMEA market back in 2020 with a USD 2 billion investment pipeline, the company approached the European banking market to fund its greenfield projects in Zurich, Berlin and Frankfurt using two separate portfolio financing structures – both co-financed by SFS.
Thanks to Siemens Financial Services, all the right partners came together. This offers enormous growth potential as market demands evolve.
By providing this loan, Siemens is bringing the partnership with Vantage Data Centers to a higher level than a pure customer/supplier relationship. Siemens is demonstrating commitment and belief in Vantage growth plans and together we are sharing visions on how to shape the Datacenter industry more sustainable.
Another recent example is the project that SFS is working on with atNorth, a leading Pan-Nordic data center services company offering sustainable, cost-effective, and scalable co-location and high-performance computing services across Iceland, Sweden and Finland. Support from SFS enabled the company to expand its total power capacity of more than 115 MW across the Nordics, and now SFS financing is helping it to acquire two additional data center facilities in Finland from Advania AB. The acquisition increases atNorth’s sustainable data center footprint in the region, as the company remains committed to the use of renewable energies and heat re-usage at its data centers, and supporting circular economy principles.
atNorth powers the most demanding IT workloads across multiple customer segments globally. As we strive to become a preferred partner of choice for our customers and support their journey to net zero, we will develop sites in markets with attractive power dynamics and a highly competitive total cost of ownership. Maintaining our best-in-class sustainability credentials remains at the heart of our value creation plan.
Likewise, Polish data center operator Atman is further demonstrating how financing can enable digital transformation in a sustainable way as, in January 2023, it pledged to offset 100 percent of the energy consumed by its facilities with renewable energy. With the help of SFS, the company has raised PLN 1.35 billion (approx. USD 345 million) to further its developments in Poland. The loan, which requires Atman to meet energy efficiency and corporate sustainability requirements, will mostly go toward developing the company’s WAW-3 DC campus near Warsaw. Once completed, this data center will house three buildings with a total colocation area of nearly 19,000 square meters (204,515 square feet) across 36 data halls and offer 43MW of capacity – enough for 50,000 servers.
The support provided to Atman by six leading financial institutions is the largest syndicated loan obtained in Poland for the development of data centers. The excellent condition of the company has been recognized by domestic and foreign financing institutions in the form of loans granted, which will enable further dynamic development of Atman as a leading data center player in Poland and the CEE region.
These cases are only the beginning: The European data center market as a whole is on the brink of massive growth – a 60 percent increase in revenue in the next six years – with Germany leading the charge as the country with the most data centers in Europe. As the importance of data centers continues to grow, so too does the importance of appropriate financing solutions. SFS is ideally positioned as a partner to support investment this dynamic sector. Furthermore, in light of the energy consumed by data centers, greenfield financing success stories such as Vantage, demonstrate that these projects can be undertaken in a sustainable way.
With its track record and its unique combination of industry and financing know-how, SFS is in an optimal position to support new and upcoming technologies driving digital transformation by commercializing complex and capital-intensive projects such as data centers.
