Between US$3 trillion and US$5 trillion is expected to flow into global data centre development from 2025 to 2030, with around 25% of that new capacity directed to Asia Pacific.
Unlike other real estate assets, data centres are operationally complex — requiring the simultaneous management of power, cooling, security, IT, and compliance — and are capital intensive, and expected to run 24/7. For lenders, sponsors, operators, and investors, this makes securing and maintaining financing, and executing transactions especially complex.
To succeed, owners, developers, and deal teams must address three key risk areas across the asset lifecycle.
1. Physical, natural catastrophe, and site infrastructure risks
Lenders need assurance that your site is resilient to physical and environmental threats and can recover within acceptable timeframes — particularly where infrastructure dependencies create cascading failure risks.
What do lenders scrutinise?
- Concentration risk: Multiple sites are clustered within a single hazard zone (e.g. flood plain, seismic corridor, or grid region), creating correlated exposure.
- Infrastructure dependencies: Reliance on power grids, fuel supply chains, fibre connectivity, and other critical utilities where failure in one can cascade across systems.
- Water availability: Constraints on water supply that can affect cooling capacity, PUE performance, and ultimately uptime guarantee.
- Climate and regulatory transition risk: The potential for evolving standards (e.g. flood zone reclassification, emission caps, Power Usage Effectiveness limits) to impose unplanned capital expenditure on existing assets.
Building physical resilience for data centre sites:
Marsh combines forward-looking resilience planning with structured risk transfer, helping data centre owners turn physical risk into a bankable, manageable proposition. We can help with:
- Forward-looking risk analysis including climate modelling, natural catastrophe exposure assessment, and on-site risk engineering to inform site selection, design standards, and mitigation strategies.
- Structured property insurance programs covering material damages and business interruption, designed to meet lender covenants and financing requirements.
- Parametric risk transfer solutions that can deliver faster claims settlement upon a predefined trigger event, protecting cash flow and operational continuity when speed matters. They can also bridge coverage gaps where traditional insurance capacity is constrained, an increasingly important consideration as insurers face rising exposure limits on high-value data centre projects.
2. Credit and cash flow risks
To support financing, stakeholders need to show that the drivers of repayment are accounted for and protected across the project lifecycle.
What do lenders scrutinise?
- Cash flow certainty including performance obligations and termination rights.
- Construction and commissioning risks including schedule slippage and cost overruns.
- Power availability, reliability, and pricing including the terms of power purchase agreements.
- Sponsor and operator experience including track record navigating complex projects in the region.
- Worst-case recovery position including what lenders can recover under the project structure if things go wrong.
How to build credit and cash flow resilience:
Marsh helps strengthen the evidence behind the risk case and structure solutions designed to protect cash flow and meet lender expectations with:
- Evidence-based due diligence that demonstrates risk identification, quantification, and management.
- Credit insurance solutions that can cover non-payment risk to help lenders evaluate transactions and potentially deploy capacity with greater confidence.
- An insurance and risk transfer program designed to meet lender expectations on limits and structure, particularly in higher-risk geographies.
- Guidance on alternative financing routes — including private equity and private credit structures — for developers who cannot secure traditional bank financing, and where stricter covenants and higher interest margins typically apply.
3. Transactional and M&A risks
Digital infrastructure platform owners are increasingly using M&A as part of a broader recapitalisation strategy — whether through partial sell-downs or full portfolio exits. Sellers in this context are more focused on clean exits with minimal post-closing recourse. Deals can be affected if risk allocation is unclear or diligence does not provide enough certainty for the buyer to step into the risk.
What do buyers scrutinise?
- Condition of assets and property, plant & equipment (PP&E): Independent verification that physical assets and critical machinery are properly maintained and in sound operating condition.
- Material contracts: Buyers must understand whether key customer and service agreements carry onerous terms, unresolved disputes, or change-of-control provisions that could be triggered by the transaction and erode post-deal value.
- Regulatory compliance: Assurance that the target holds all licences necessary to operate lawfully, and that there is no material risk of breach or non-renewal that could disrupt the business going forward.
- Land use rights: Certainty that the target holds valid title or lease rights to the land underpinning its operations, together with the necessary permissions to continue using it.
- Tax issues: Rigorous review of tax exposures — including capital gains, incentives, and audit history — with clear justification from advisors for any areas excluded from scope.
How to build M&A risk resilience:
Marsh can help deal parties manage risk transfer early so that deals can progress with greater confidence through signing and closing with:
- Warranty and indemnity insurance to enable cleaner exits and provide buyers with greater post-completion recourse.
- Tax liability, contingent risks, and specific title risks insurances to address specific known issues/indemnities that could derail a transaction or prevent the seller from enjoying a fully clean exit.
- An insurance-optimised transaction process from day one, aligning the warranty package, due diligence scope, and underwriting approach early to maintain deal momentum and closing certainty.
Hear it from the experts: How data centre owners navigate financing risks
Marsh Asia experts discuss how financing risks shift across the asset lifecycle and how risk transfer solutions can keep your projects bankable.
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Navigate the risks that make or break data centre financing
Developers, operators, and deal teams who address financing risks early consistently secure better terms. Speak with us to discuss how you can identify, quantify, and manage these risks.
