Multilateral bank Asian Infrastructure Investment Bank AIIB is investing $150 million in the development of data centers that mostly serve emerging Asia.
This is AIIB's first data center project, as India will be a key founding member of the Keppel Data Centre Fund II KDCF II, a private equity vehicle managed by Alpha Investment Partners Limited. Multilateral development has invested in digital infrastructure in the past. The increase in 5 G technology and other high-speed supercomputing digital infrastructure is making these investments more important today, due to the Pandemic.
AIIB's investment of $100 million through a parallel fund structure and $50 million through co-investments marks the end of KDCF II. The fund is focused on strategic investments in the fast-growing data center sector with a focus on Asia Pacific.
Many low and middle-income countries lack their own domestic data infrastructure, and the disparities in data center penetration among countries with different income levels are large, and the disparities in data center penetration are wide. Major global investors have shunned investment in emerging and frontier economies because of the shortcomings in the investment climate. This project will increase capital mobilisation to develop data centers serving emerging Asia.
Dongik Lee, director general, Banking Department Region 1 said the digitalisation mega trend is shaping global markets and business operations. This trend has been accelerated due to the COVID 19 pandemic. Data centers are essential components of the digital ecosystem and attractive investment targets, as identified by AIIB's Digital Infrastructure Sector Strategy.
A prior review of investments presenting significant environmental and social ES risks like involuntary resettlement, adverse impacts on Indigenous peoples, environment, community health and safety, and more will be conducted.