In today’s high-stakes digital economy, datacentres are the backbone of connectivity, AI processing, and cloud computing. Yet, securing financing for these highly capital-intensive projects remains a challenge. Investors and lenders are more selective than ever, demanding robust funding structures that minimise risk and ensure long-term profitability. If you want your datacentre project to attract financing on competitive terms, here are the top five bankability factors you need to get right.

1. Power: Securing a Reliable, Scalable Energy Supply

Power availability has always been a key issue for datacentres, but with the explosion of AI workloads and hyperscale demand, it’s now a key bottleneck, particularly in regions such as Asia where power suppliers tend to be government-owned monopolies and the power industry is creaking after decades of underinvestment. Extending high-capacity power lines to new development sites can take at least four years in many markets. Banks will scrutinise your power arrangements to ensure that:

• you have formal commitments from suppliers (in the form of a power purchase agreement) guaranteeing sufficient megawatts with step-up rights to reflect different stages of greenfield developments coming online and to meet future growth projections;
• backup plans are in place, such as comprehensive on-site battery storage solutions (which are often powered by renewables such as rooftop solar), UPS systems and generators to mitigate the risk of outages; and
• your design and build specifications and cooling equipment are all aimed at improving power usage effectiveness (PUE).

In certain jurisdictions such as Japan, we are seeing power providers entering into joint ventures with datacentre operators and developers, which gives the operator/developer (and therefore a potential lender) a greater level of comfort regarding the ongoing provision of power for the datacentre.

Without a solid power strategy, even the most sophisticated datacentre operator or developer with a well-located datacentre may struggle to secure financing.

2. Customer Commitments: Securing Anchor Tenants Early

Detailed due diligence on key revenue generating contracts will be a crucial part of the lending bank’s credit approval, particularly in non-recourse or limited-recourse financing structures. 

To make your project more bankable:

• seek to obtain commitments from prospective customers before securing finance. In the current market, a customer is unlikely to give a firm commitment before power supply and financing has been secured for the project, but banks are increasingly willing to accept “soft” commitments such as a letter of intent from the customer or term sheet as a basis to commit to providing a facility;
• structure customer contracts (which are usually in the form of leases) with clear termination protections: banks will be wary of agreements that allow customers to terminate the lease at will or for minor delays in the development of the project or minor service interruptions;
• show predictable cash flows through long-term contracts with take-or-pay commitments where possible; and
• recognise that hyperscaler demand is growing rapidly, but their bargaining power is strong. Many hyperscalers insist on using their own standard terms, which often heavily favour their interests. This can create challenges in balancing lender requirements with customer demands.

Lenders want certainty, and nothing provides that better than committed revenue streams from creditworthy customers. However, structuring agreements that satisfy both tenants and banks requires careful negotiation.

3. Land & Legal Structuring: Avoiding Ownership Risks

Land tenure is a major financing concern. Banks will conduct due diligence on your land rights to ensure that:

• lease agreements have sufficient tenure and renewal rights;
• lease agreements include standard lender-friendly provisions in the event of default by the borrower (although banks are increasingly willing to enter into tripartite agreements with the operator/developer and the customer allowing the customer step-in rights in priority to the lender in case of default); and
• the project structure ensures clean security over assets, with clear ownership of the datacentre infrastructure and no unexpected encumbrances.

A poorly structured land arrangement can create deal-breaking risks for lenders, so resolving these issues early is essential.

4. Construction & Technology Risks: Managing Complexity

The rapid evolution of datacentre technology brings both opportunities and challenges. Banks are particularly cautious about:

• the choice of construction contracts - turnkey or aggregated models tend to be preferred for their risk allocation clarity;
• performance guarantees and warranties on critical equipment, as lenders may view new technologies with scepticism until proven at scale; and
• supply chain risks - ensuring that key technology providers and contractors have strong financial credentials or performance bonds in place and that critical equipment such as graphics processing units are being imported into the relevant jurisdiction in accordance with all applicable U.S. restrictions.

With hyperscalers demanding cutting-edge efficiency and sustainability, projects often integrate emerging technologies. However, without the right contractual protections, these innovations can become financing obstacles.

5. Green Financing & ESG Compliance: Tapping Into New Capital Pools

Sustainability is no longer optional - it’s a competitive advantage in securing financing. Green bonds, ESG-linked loans, and sustainability-focused investors are reshaping how datacentre projects get funded.

To enhance your project’s bankability:

• align with green financing frameworks by committing to energy-efficient design and renewable power sourcing;
• obtain certifications such as LEED or BREEAM to demonstrate sustainability credentials; and
• structure financing to include sustainability-linked interest rate reductions, which some lenders may offer as an incentive.

As regulatory and investor pressure mounts on climate-related disclosures, projects with strong ESG narratives will find it easier to attract funding on favourable terms.

Final Thoughts: Positioning for Success

The financing landscape for datacentres is shifting rapidly, with power availability, hyperscaler influence, and sustainability concerns at the forefront. By addressing these five key bankability factors - power, customer commitments, land security, construction risks, and ESG compliance - you can position your project for success in an increasingly competitive market.

With demand for datacentres at an all-time high, the opportunity is there. But only the best-structured, most bankable projects will secure the funding to move from concept to reality.

Greenberg Traurig has one of the leading digital infrastructure practices in the world and we advise investors, developers, operators and hyperscalers on all aspects of the sector from M&A to project developing and financing and customer contracting and we would welcome the opportunity to discuss our expertise and how we can support your activities.