Digital Infrastructure & Project Finance

With Digital Infrastructure Financing we provide customized and flexible financing solutions to support the development and expansion of digital infrastructure projects, such as data centres, broadband fibre networks and telecom towers.

We typically offer Senior Debt as part of a lending club of relationship banks, experienced digital infrastructure banks, infrastructure funds and as a participant on larger transactions.

With our financing we focus on sustainable and innovative projects that support the transition to a low-carbon economy and are making use of renewable energy and green technologies.

We finance:

• Data centres
• Broadband Fibre optic networks
• Telecom Infrastructure

Considering the environmental impact of data centers (DCs) due to their substantial electricity usage and the need for scarce land and water resources, NIBC offers financing for:

• Hyperscale Data Center investments: large-scale facilities supporting cloud computing, big data processing, and other high-demand applications. Centralizing data storage through hyperscalers enables more efficient energy utilization compared to dispersed collocations.
• Colocation Data Center investments: providing space, power, and cooling infrastructure for multiple tenants to house their IT equipment, offering shared resources and services for businesses outsourcing their IT infrastructure.

Our financing options cover greenfield projects with the latest energy-efficient technologies, supporting environmental pledges such as commitments to carbon-free/renewable energy sources and projects that focus on water conservation and reuse, intended use for waste heat, renewable sources of energy and with ESG certifications.

For brownfield projects, we offer financing on a selective basis, focusing on defined strategies for 'upgrade' capital expenditures (CAPEX) and improved energy efficiency.

We refrain from financing DC’s associated with cryptocurrency activities due to lack of meaningful contributions to society.

For digital infrastructure projects in Europe we offer financing between EUR 15m up to EUR 50m with our sweet spot being EUR 25m.

We typically work together with other financing institutions to enable bigger financing needs. 

Interest rates and terms for digital infrastructure financing and project financing vary depending on the specific project being financed and the ticket size.

Interest Rates: Interest rates for digital infrastructure financing and project financing are determined by factors such as risk profile, collateral and the duration of the loan. 

Terms: The terms associated with digital infrastructure financing and project financing can vary from a few years to a maximum of seven years, depending on the type of financing and the project being financed. 

Collateral: Digital infrastructure financing and project finance requires collateral, such as the assets being financed, as security for the loan.

Down Payments: Digital infrastructure financing and project finance also require equity contribution from the borrower.

1. Identify Financing Options: Once your project plan is in place, the next step is to identify potential sources of financing, such as banks, development banks, government agencies, private equity firms, institutional investors, or public-private partnerships.
2. Due Diligence: Due diligence will be conducted to assess the creditworthiness and the viability of the project. This includes reviewing financial statements, planning, project-related contracts, assessing market demand for the project or service, and evaluating associated risks.
3. Discussing financing terms: We will present you our tailormade financing terms.
4. Closing: Once the terms of the financing have been agreed upon, a loan agreement will be signed, and you will receive the funding for your infrastructure project. 

The creditworthiness of borrowers for financing is evaluated using a combination of quantitative and qualitative factors. It's important for borrowers to have a strong financial history and a viable business plan to increase their chances of being approved for financing.

We typically consider:

• Financial Information: We evaluate financial information to assess income, assets, and liabilities. This includes analyzing the balance sheet, income statement, and cash flow statement.
• Business Plan: We evaluate the business plan to ensure the project's viability. This includes conducting a market analysis and assessing revenue and cost projections as well as risk factors.
• Collateral: We assess the available collateral that is being offered as security for the loan, such as the digital infrastructure assets being financed.
• Experience: We review your experience and track record in the digital infrastructure industry or in related sectors.

Digital infrastructure financing and project finance can be provided by a variety of sources. NIBC offers Senior Debt as part of a lending club of relationship banks, experienced (digital) infrastructure banks, infrastructure funds, and as a participant on larger transactions.

We typically work together with these lenders:

• Banks and Financial Institutions: Traditional banks and financial institutions, like NIBC, may provide financing for digital infrastructure projects, including loans, bonds, and other financing options.
• Development Banks: Development banks, such as the European Investment Bank (EIB) or the International Finance Corporation (IFC), may provide financing for digital infrastructure projects that support sustainable development.
• Government Agencies: Government agencies may provide financing / subsidies for digital infrastructure projects, particularly those that support public services, such as broadband networks and telecom infrastructure.
• Private Equity Firms / Infrastructure Funds: Private equity firms and infrastructure funds can provide the necessary equity capital for digital infrastructure projects.
• Institutional Investors: Institutional investors, such as pension funds and sovereign wealth funds, may invest in digital infrastructure projects as part of their investment portfolio.
• Public-Private Partnerships: Digital infrastructure projects may be financed through public-private partnerships, in which the public and private sectors work together to finance and develop infrastructure projects.

Overall, digital infrastructure financing and project financing for digital infrastructure represents a unique set of challenges and opportunities that differ from traditional infrastructure financing. It requires a specialized set of skills and expertise to navigate the complex market dynamics and regulatory environment associated with digital infrastructure projects, which we can offer. 

• Technology Focus: Digital infrastructure financing and project financing for digital infrastructure is specifically focused on funding technology-based projects that are designed to enable or enhance digital services, such as data centres, fibre optic networks, and telecom infrastructure.
• Traditional infrastructure financing, on the other hand, focuses on funding physical infrastructure projects, such as roads, bridges, and airports.
• Risk Profile: Digital infrastructure projects typically involve higher levels of risk than traditional infrastructure projects, due to their reliance on cutting-edge technology and rapidly evolving markets. This can make digital infrastructure financing more challenging to secure and more expensive than traditional infrastructure financing.
• Financing Models: Digital infrastructure projects often require more innovative financing models than traditional infrastructure projects. For example, some of these projects may be funded through public-private partnerships, while others may rely on other alternative financing options.
• Regulatory Environment: The regulatory environment for digital infrastructure projects can be complex and rapidly changing. This can make it more difficult to secure financing for these projects.
• Market Dynamics: The market for digital infrastructure projects is often more dynamic and competitive than the market for traditional infrastructure projects. This can make it more difficult to secure financing for these projects.

Digital infrastructure financing or project finance carries risks that should be carefully evaluated before committing to a project. It's important to have a comprehensive risk management plan in place to mitigate these risks and ensure the project's long-term success.

Key risks that we consider are:

• Technology Risk: Digital infrastructure projects involve the use of cutting-edge technology. As such, there may be technological risks associated with the project that could impact its performance, reliability, and scalability.
• Market Risk: Digital infrastructure projects are often highly dependent on market demand and competition. If market conditions change or if new competitors emerge with improved technology, the project may become less profitable or unfeasible.
• Regulatory Risk: The digital infrastructure industry is subject to a range of regulations and policies that can impact the viability and profitability of projects. Changes in regulations or policies can have a significant impact on the project's financial performance.
• Financing Risk: Digital infrastructure projects often require significant upfront capital investment and long-term financing. If financing is not available or interest rates rise, the project may become unfeasible.
• Operational Risk: Digital infrastructure projects require ongoing maintenance, upgrades, and monitoring to ensure optimal performance. Operational risks include equipment failure, cybersecurity threats, and natural disasters, which can impact the project's performance and financial feasibility of the project.

Senior debt is a type of financing that is considered less risky than other types of debt because it has priority over other claims on the borrower's assets or cash flows.

Senior debt is usually issued at a lower interest rate compared to other, riskier forms of debt because of its priority status. It can be used to fund a range of corporate activities such as acquisitions, expansions, and capital expenditures. In addition, senior debt is secured against the assets of the borrower.

Yes, NIBC does provide financing to infrastructure funds. These funds play a crucial role in financing projects related to infrastructure development.

NIBC offers tailored financing solutions to support growth and expansion, enabling funds to invest in a wide range of infrastructure projects and initiatives focused on sustainability and energy transition.

By partnering with NIBC, infrastructure funds can access financing and strategic support to drive their investment objectives and contribute to positive environmental and social impact.