Global Infrastructure Partners has launched a US$530m loan to construct a data centre in Thailand, the first syndicated loan that will fund the kingdom’s emergence as South-East Asia’s second-largest market for the rapidly growing industry.
In May, GIP partnered with True IDC, a unit of local conglomerate Charoen Pokphand Group, to invest in Thai digital infrastructure and support the growth of AI and cloud computing. One of the joint venture's first projects is a greenfield data centre in Rayong Province, on the eastern side of the Gulf of Siam.
The plan comes as the Thai government has approved 28 projects worth a combined Bt521.2bn (US$16bn) in the first half of the year to address the soaring demand for cloud computing services from hyperscalers, according to Thailand’s Board of Investment.
Digital Edge DC, a joint venture between Stonepeak-backed Digital Edge and B Grimm Power, and DayOne are among the developers in talks with banks to fund data centres of 96MW and 120MW, respectively.
Others with plans for data centres in Thailand include Bridge Data Centres, Beijing Haoyang Cloud&Data Technology, Chinese-invested Galaxy Data Center and Australia’s NextDC, for facilities of combined capacity of at least 650MW.
“Thailand is really booming,” said a Singapore-based loan banker. “There are big data centres of 100MW and larger planned and quite a number of developers are shopping around for financing.”
The government’s focus on boosting its high-tech industries has led hyperscalers to increase their presence in Thailand, leading to the development of larger capacity campuses and multi-building projects that require more capital.
The data centre pipeline stands at over 2,436MW of new capacity, which makes Thailand the region’s second-largest market after Malaysia, according to a report from consultancy DC Byte released in May.
Industry sources estimated the capital expenditure required to be around US$10m per megawatt, so projects could require over US$24bn to build in the coming years.
BlackRock-owned GIP’s 82.6MW data centre JV with CP Group and True IDC could be expanded to over 100MW later with funding via an accordion to the US$530m bullet loan for borrower Thai DC One. The offtaker is TikTok, owned by Chinese technology giant ByteDance.
The facility is part of GIP's plan to invest US$3bn–$5bn into Thailand’s digital infrastructure sector.
GSA, a JV between Gulf Development, Singapore Telecommunications and Advanced Info Service, is developing a 35MW facility, which may tap the loan market later this year. It follows a Bt7.3bn seven-year amortising limited recourse green loan for GSA Data Center 01 that was clubbed in August.
That financing funds a 25.6MW greenfield co-location facility that is targeting a mix of technology companies, artificial intelligence firms and graphic processing service providers as offtakers.
Government drive
Thailand’s emergence as a new data centre hub is driven by government incentives and support for the development of such infrastructure, a second banker focused on the TMT sector said.
The measures include exemptions on incomes taxes and import duties, land ownership rights, foreign fund remittance privileges and the ability to hire skilled international staff.
Thailand offers stable electricity supply and is also targeting the need for renewable energy for power-hungry data centres via a Utility Green Tariff programme that allows operators to procure certified green electricity and the Direct Power Purchase Agreements scheme that allows operators to buy up to 2GW of renewable power directly from producers.
“Thailand is very forward-looking about artificial intelligence,” the second banker said, noting the government’s collaboration with Nvidia to build sovereign AI capabilities, “so there is a lot of push to localise AI growth and computing power.”
In market
Clifford Capital, Credit Agricole, Deutsche Bank, HSBC, Standard Chartered and Sumitomo Mitsui Banking Corp are the mandated lead arrangers, bookrunners and underwriters of the US$530m five-year loan.
The loan pays an interest margin of 270bp over term SOFR, which will step down to 250bp once operational.
MLAs committing US$50m or more will earn a top-level all-in pricing of 282bp via an upfront fee of 60bp, while lead arrangers providing US$25m–$50m will receive a 279bp all-in via a 45bp fee, based on the opening margin of 270bp.
The financing also includes a baht tranche that is not being syndicated.