The Asia Pacific data centre market has become one of the most dynamic and strategically important asset classes globally. Data centre capacity in the region is expected to grow at a compound annual growth rate of 16% between 2024 and 2030, thanks to rising demand for artificial intelligence, cloud adoption and digitalisation.
The amount of investment needed is also substantial: about $116 billion to build out the existing data centre pipeline across APAC in the coming five to seven years.
The rising popularity of data centres has prompted a significant uptick in investor demand.
Speaking at the 2025 PFI Financing Energy Projects in Asia Conference in Singapore, Ramakrishna Pataballa, Head of Energy, Resources and Infrastructure, Asia at BNP Paribas noted that private equity firms and infrastructure funds are looking to put their money to work, while private credit firms are equally keen to capitalise on data centre opportunities.
This rapid growth has prompted the adoption of regulatory frameworks designed to support the industry in a number of regions – setting the stage for more growth.
The most important development, perhaps, is the growing convergence of digital infrastructure with energy, as technology majors with ambitious climate targets drive renewable energy procurement for their data centres, reckons Pataballa. This is critical. The growth and economic activity brought by digitalisation have profound implications on the environment. Data centres may be indispensable to powering the digital economy, but they are also energy and water intensive, leading to larger carbon footprints and slowing down countries’ decarbonisation journeys. Identifying ways to green data centres is critical to minimising the climate impact.
This explains why governments may be supportive of data centre development, but cautiously so.
❝ The most important development, perhaps, is the growing convergence of digital infrastructure with energy, as technology majors with ambitious climate targets drive renewable energy procurement for their data centres. ❞
Pataballa points to Singapore’s Green Data Centre Roadmap, unveiled in May 2024, as an example. The country is aiming to provide 300 megawatts of additional capacity for data centres, and further capacity if green energy is used, in an attempt to balance energy efficiency with growing demand.
“They are talking about megawatts, not gigawatts, signalling a prudent approach to the rapid expansion of data centres and their implications for energy efficiency and the green roadmap. The sector’s growth is promising, but it’s unlikely to follow a straight-line trajectory.”
Capacity is one thing. Financing data centre growth is another. Banks’ ability to support deals across the capital spectrum, leverage their cross-sectoral expertise, and help sponsors establish a business model that is future proof will be essential to propel the market further and to find new business opportunities, says Pataballa.
Markets such as Singapore, the Philippines, Vietnam and Thailand are emerging as the world’s next data centre hotspots. But Shalen Shivpuri, Head of Real Assets, Apac, & Head of Energy, Resources and Infrastructure, APAC at BNP Paribas, reckons investors should also look closely at India for the potential it holds – both for data centres and its broader renewables push.
India targets sustainable growth
India has made significant strides to transform its energy mix from oil and gas to include solar and clean energy. In 2024, 83% of power sector investment went to clean energy.
Take Solar Energy Corp of India, which conducted its first renewable ammonia auction this year when it set a new price point for global trade. It chose seven developers as suppliers of 724,000 metric tons per year of clean fuel, at a weighted average price of about $604 per metric ton – showing that large-scale projects in India can clear at low prices, says Shivpuri.
“When it comes to clean ammonia, India will be the third most important country after China and the US,” he adds.
Shivpuri is equally positive about data centre prospects in India. When it comes to the cost of building data centres and utilities costs, India will score better than many of its peers, making it a highly relevant digital hub.
“There is ample real estate and ample green power, so there can be ample green data centres. It’s an opportune time for data centres in India,” says Shivpuri.
For financiers looking to play an active role in India renewables broadly, there’s a catch: having Indian rupee liquidity will be key for success.
Shivpuri says the rupee market is becoming highly competitive, with liquidity coming not only from domestic banks, but also larger financial institutions, mutual funds and asset managers.
❝ If international banks want to play a role in India infrastructure, they will miss the bus if they don’t have Indian rupee funding capabilities. ❞
This capability will go a long way in other markets and asset classes, too.
Offshore wind in sight
Across the spectrum of renewable-energy sources, offshore wind remains a key pillar as a mature, proven technology, and is poised for multi-fold growth in Asia Pacific markets over the next 5 years. Taiwan has been the largest offshore wind market in APAC (excluding China) having successfully closed 10 offshore wind projects to date. South Korea, Japan and Philippines are expected to be close behind over the next decade.
Financing these projects, however, presents its own set of challenges. Pradeep Kejriwal, Director, Project Finance, APAC, at BNP Paribas says the offshore wind industry is one that requires more liquidity than others, and large sized projects may be constrained by the depth of the local currency financing market.
❝ The offshore wind industry is one that requires more liquidity than others, and large sized projects may be constrained by the depth of the local currency financing market. ❞
In Japan, for example, project costs have increased significantly since they were awarded in 2021 due to a decline in the value of the Yen. With much of the project costs being on a non-yen basis, coupled with the increase in long-term JPY interest rates, this has put pressure on developer returns.
“As advisers, we need to capture these trends and work out liquidity constraints in different markets, especially for offshore wind as it needs more liquidity,” says Kejriwal.
He adds that most of the meaningful action on offshore wind has been in Taiwan so far, where projects have reached financial close, gone into construction and into the operational phase, resulting in the development of a local supply chain in the region for these projects.
BNP Paribas has been an active supporter of the sector in Taiwan since 2018 when it advised on the country’s first offshore wind transaction. The team has since seen the market evolve from being dominated by international banks to having diverse liquidity sources including Taiwanese State-owned banks and life insurance companies, in addition to the continued support of export credit agencies and international banks.
For example, BNP Paribas recently acted as the financial adviser on a $3.1 billion financing to support a 495-megawatt wind farm off the coast of Taiwan. The March 2025 deal received commitments from a group of 33 financial institutions including 27 Taiwanese and international lenders, and was also supported by four export credit agencies and The National Credit Guarantee Administration in Taiwan.
“This shows the resilience of the Taiwan market; there have been lots of changes, but banks continue to be supportive of well-structured transactions involving experienced Sponsors,” says Kejriwal.
Regulatory stance, liquidity pools and market conditions will continue to evolve as Asia Pacific’s energy financing market becomes more sophisticated and grows in scale. Advisers and financiers like BNP Paribas – with deep cross-sectoral expertise and proven structuring know-how – will continue to be a primary port of call for data centre developers and other renewable energy players seeking support, capital and deep understanding of market trends.
