Accra:Funding needs for Malaysia's data centres and related graphics processing units (GPUs) are anticipated to exceed the limits of domestic bank lending over the next three years, as reported by S&P Global Ratings.

According to BERNAMA News Agency, Yijing Ng, Director of Corporate Ratings, noted that data centre operators in the Asia-Pacific (APAC) region have largely relied on bank financing and equity. However, banks are nearing their sectoral lending limits. Ng highlighted the ongoing growth of data centres and the increasing inclusion of GPU financing in banks' lending portfolios. This trend suggests a shift away from traditional bank financing for digital infrastructure in APAC.

Ng pointed to the United States as a model for data centre financing and suggested that structured finance, especially asset-backed securities (ABS), could be viable in mature APAC markets with appropriate regulatory support. She mentioned Australia, Singapore, and Japan as markets with a strong history of ABS issuances.

She also acknowledged a limitation of structured finance, which is the unmitigated construction risks, as ABS usually involves a pool of stabilized assets. In scenarios involving construction risk, APAC operators might opt for project finance or private credit options. Ng concluded by predicting that capital recycling and debt through REITs or funds might become more prevalent in the later stages of these operators' development.