For data centre operators in Europe, D-Day is not so far away. From 1 January 2024, owners and operators who are not already doing so must start collecting reporting data as part of a broader EU-mandated shift towards legislation-led, rather than self-regulated accountability.
Notes Colm Shorten, global strategy & innovation at JLL: ‘The EU’s new Corporate Sustainability Reporting Directive (CSRD) makes businesses more publicly accountable by obliging them to regularly disclose information on their societal and environmental impact.
‘There is a clear shift from a self-regulated initiative (SRI) approach to a mandatory legislative approach and before the year is out, we will see no less than four separate pieces of legislation in play which directly apply to data centres.’
It is unsurprising that the EU now has data centres in its crosshairs after many years of wrangling with their apparent mission criticality to the growth of cities, set against their fearsome energy consumption metrics.
The latest round of rules makes independent assurance of an asset’s data against international standards now compulsory, in the face of penalties. Adds Shorten: ‘Data centres and the ICT sector should be part of the climate solution and not part of the problem.
‘The starter pistol has been fired and while the main changes in legislation affect the EU, history has taught us that EU directives and mandates are commonly adopted globally, if at a slightly slower pace.’
Virtuous growth
Despite the sector historically struggling to attain environmental, social and governance (ESG) alignment, a lot has changed in recent years. AtlasEdge is among the sector’s next generation of ESG-focused pan-European data centre providers which are seeking to achieve virtuous growth.
In February of this year, AtlasEdge successfully acquired Datacenter One, to become Germany’s leading distributed platform. The Datacenter One deal brought with it four data centres in Stuttgart (x2), Dusseldorf and Leverkusen, as well as additional locations under construction, to complement AtlasEdge’s existing sites in Hamburg and Berlin. Said Giuliano Di Vitantonio, CEO, AtlasEdge at the time: ‘The acquisition of DC1 is another significant moment in our journey to build Europe’s leading Edge platform.’
Building on that, the business has more recently secured a scalable €725 mln facility underwritten by mandated lead arranger ING Bank, as well as ABN Amro, Crédit Agricole CIB, The Bank of Nova Scotia, National Westminster Bank, Banco Santander and UniCredit Bank.
The financing package consists of €525 mln in committed debt financing and a further €200 mln uncommitted accordion. The financing also includes sustainability-linked targets focused on efficiency and renewable energy usage.
The facility as a whole provides the firm with firepower to execute further strategic M&A and build new sustainable sites throughout Europe, the firm said.
'We are delighted to have partnered with a group of top-tier financial institutions whose ambition matches our own and are willing to continue to support us in the future,' says Ron Huisman, chief financial officer, AtlasEdge. 'This is a bespoke and highly sought-after facility with in-built flexibility that allows us to move rapidly to realise new growth opportunities.'
Sicco Boomsma, managing director within ING’s TMT sector financing team, underlines that there is finance available for the right kinds of projects: 'Borrowers are reminded that, at a time where the real estate and leveraged-loan markets have become more challenging, there is still significant liquidity available from infrastructure-focused lenders.
'ING’s appetite for the data centre sector remains strong and we are proud to support AtlasEdge’s European Edge data centre expansion plans.'
UK potential
UK data centre specialist Kao Data is another firm which is proving that sustainable growth is possible. The business recently secured an industrial-scale site for redevelopment at Kenwood Point, Manchester, with the aim of establishing a new 40MW data centre.
According to Kao, the development represents an investment of £350 mln (€400 mln), with the facility set to follow Kao Data’s design, energy efficiency and sustainability ethos, and include heat re-use capabilities.
Following the acquisition of two new data centres last year, the move represents the next phase in the continued expansion of the Kao Data platform, with Manchester named as the first of its new Tier II locations in Europe.
'Our move into Manchester marks an important next step in the continued evolution of our organisation, and we’re excited to bring our industry-leading data centre platform to one of the UK’s most influential technology and business hubs,' says Spencer Lamb, chief commercial officer, Kao Data.
'We believe our new facility will set a new standard for sustainable data centres within the region and will provide a piece of foundational infrastructure that supports both Northern England’s advanced computing clusters, and the UK governments’ ambitions to become a technological and economic powerhouse for HPC and AI.'
The 39,000 m2 ex-industrial site is expected to provide space for nine data halls, with plans to launch operations in late 2025.
The facility will be powered by 100% renewable energy, and utilise hydrotreated vegetable oil (HVO) in its generators – providing the highest-grade, sustainable data centre capacity in the region.
Furthermore, the data centre will incorporate heat re-use capabilities, supporting local communities in its immediate vicinity with a valuable resource in the wake of the cost-of-living crisis.
Manchester has been hailed as one of the UK’s fastest growing technology hubs and the city’s technology ecosystem is projected to add £74.8 bn GVA (gross value added) to the UK economy.
