AIIB: Investment in Asia’s Data Infrastructure

The Asian Infrastructure Investment Bank (AIIB) is set to invest $150 million in the development of data centers to mostly serve emerging Asia.

Highlights

  • AIIB will channelise funds through the Keppel Data Centre Fund II (KDCF II), which is a private equity vehicle. It is managed by Alpha Investment Partners Limited (Alpha).
  • It is going to be AIIB’s first data center project.
  • AIIB’s investment of USD100 million by means of a parallel fund structure and USD 50 million through co-investments is the final close of KDCF II.
  • The fund focuses on strategic investments in fast-growing data center sector, by focusing on Asia Pacific.

What is the need of this project?

Multilateral development banks have been investing in digital infrastructure in the past. In present time, such investments are becoming more essential with the acceleration of 5G technology and other high-speed or supercomputing digital infrastructure amid covid-19 pandemic.

Significance of the project

Several low-income and middle-income countries lack their own domestic data infrastructure. There is also a wide disparity in data center penetration among countries with different income levels. Thus, it reflects shortcomings in investment climate where major global investors are avoiding investing in emerging and frontier economies. Hence, launch of this project is significant because it will enhance capital mobilisation for developing data centers serving emerging Asia.

Asian Infrastructure Investment Bank (AIIB)

AIIB is a multilateral development bank, established with the aim of improving economic and social outcomes in Asia. Currently, there are 105 members, including 16 prospective members. AIIB was established on January 16, 2016.

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