Sustainability-linked loan for UK’s Ark Data Centres
In a world that is increasingly digital, data centres are critical infrastructure. And while digitalisation is helping to make many industries more sustainable, the underlying infrastructure should itself be more sustainable.
As more and more (big) tech companies aspire to achieve net-zero carbon emissions in their supply chains, data centres too are working towards global climate goals in terms of their energy use and consumption of natural resources. Since entering this sector more than a decade ago, ING has closed over 120 financing structures for data centre operators such as Equinix, Vantage Data Centres, Green Data Centres, Edgeconnex and Aligned Data Centres. All of our clients today are committed to following a pathway towards net zero. ING is supporting them in this journey not only with financing, but also with knowledge and advice.
One recent example is a £700 million sustainability-linked loan with the UK’s Ark Data Centres to expand its infrastructure.
“This is one of the largest sustainability-linked loans ever done for a UK data centre operator and reflective of Ark’s position as a sustainable data centre operator,” said Sicco Boomsma, managing director within ING’s technology, media and telecoms (TMT) sector financing team.
Since it was founded in 2015 Ark has embedded sustainability into its operating practices. It has a consistent track record of improving operational efficiencies, reducing carbon emissions and procures 100% of its power from renewable sources. To further encourage its sustainability efforts, the new financing structure incorporates a sustainability-linked margin aligned to Ark’s sustainability targets across five operating metrics. These relate to power usage efficiency, water usage efficiency and renewable energy. ING and Crédit Agricole CIB acted as joint sustainability coordinators on the transaction, working in close cooperation with Ark’s own sustainability team and the lenders’ technical advisor.
Ark is a respected player in the data centre industry with clients across the private and public sector (including as a joint partner with the UK government in Crown Hosting Data Centres Limited). It operates three campuses in London and surrounds, with a further three in development.
Increasing lender appetite for quality digital infrastructure assets meant the transaction was heavily oversubscribed. ING also acted as structuring bank, lead co-ordinator and hedge-coordinator on the syndicated loan, as well as joint bookrunning mandated lead arranger and underwriter with Bank of America.