Actis bets on hyperscale demand with Asian data centre platform

Actis has launched its first data centre platform in Asia in a bid to meet the growing needs of hyperscale customers amid the AI boom.

Epoch Digital has an initial 200MW portfolio with three projects across Taiwan, Malaysia, and South Korea scheduled for completion between 2025-27.

Capital for the platform comes from Actis Asia Real Estate 2, which reached a $700 million final close in April 2022. Actis partner Thomas Liu told Infrastructure Investor the firm uses a mix of real estate and infrastructure funds to invest in data centre opportunities.

Last year, its Long Life Infrastructure Fund acquired 11 data centres across Latin America – assets that were already completed and thus held no development risk.

However, for any greenfield data centre developments, Actis invests through its real estate funds.

“The greenfield development aspects of it – from acquiring the land, getting entitlement, getting approvals, getting all the power, building the core and shell – that’s all 100 percent real estate,” Liu said.

“But then you really have to understand the other half which is the infrastructure part, and that has to do with the customer.”

This customer is not a typical tenant, but rather a large cloud service provider, or hyperscaler, for whom a data centre is critical infrastructure.

Hyperscalers like Google and Microsoft have set themselves strict emissions targets: Google aims to achieve net zero by 2030, and Microsoft plans to be carbon negative in the same timeframe.

“They’ve given a much more aggressive timeframe than most governments,” Liu said.

“Everyone is very aligned and very incentivised to find renewable solutions for this massive growth in data. There’s no reversal of that.”

Actis’ renewable energy investments could play a part in meeting these targets, with platforms covering much of Asia, including Levanta Renewables for Southeast Asia, Nozomi Energy for Japan, and Argo Energy for South Korea.

“Everywhere we go where we have data centres, and where our energy and infrastructure teams have a renewable business on the ground, we will link the two. We will connect them and see how we can deliver renewables to our assets,” Liu said.

However, he said a challenge in many Asian power markets is that they are dominated by distribution channel monopolies like KEPCO and TEPCO.

The distribution arrangements mean that even if Actis acquires a renewable plant next door to a data centre, it cannot sell power directly between the two.

Instead, Epoch will use virtual power purchase agreements to obtain power through the grid.

While Actis does not hold sway over local power regulations, its infrastructure arm can find opportunities in the fact that countries like South Korea and Taiwan have a low share of renewable energy in their grids – something that hyperscalers will require a lot of.

“Our renewable credentials are important, because if we come to the table and say, ‘We will try to figure out the renewable piece’, we’re not just another data centre platform. We have a strong in-house team that knows how to do renewables in these emerging markets,” he argued.

Liu could not disclose the value of Actis’ investment in Epoch Digital but estimated the total development value of its three assets at more than $2 billion.

To date, Actis has invested more than $1.5 billion in the digital infrastructure sector.