(Sept 1): The billions of dollars being borrowed to fund data centers in Asia are pushing banks to their limits and making them more selective about which projects to finance, according to senior bankers at Barclays Plc.

Andrew Ashman, whose department helps companies secure loans, said in an interview that Asia-Pacific lenders “are reporting to be heavily exposed to the data centre sector.” As a result, banks are likely to favour familiar borrowers or deals that offer higher returns, said Ashman, who heads Barclays’ Asia-Pacific loan syndicate team.

Data centre loans in the region have surged to nearly US$29 billion (RM117 billion) since the start of last year, according to data compiled by Bloomberg. They’ve hit a record US$15 billion so far this year, a 27% jump from the same period in 2025. And there’s more to come, with Singapore-based DayOne Data Centers Ltd in talks to double an existing loan to as much as US$7 billion in what would be Asia’s largest data centre debt financing.

There are signs that banks are reaching their data centre sector limits and are looking for ways to free up capacity for more lending or pass on some of their risk. Credit Agricole CIB sought to offload a portion of a data centre loan in Hong Kong, people familiar with the matter told Bloomberg in July, while Morgan Stanley explored using a significant risk transfer to hedge its exposure.

Data centre operators in Asia, like their American counterparts, are turning to capital markets to raise new funds. Sales of asset-backed securities in the US rose last year to the highest level in a decade, with offerings by fibre-infrastructure companies and data centre owners jumping 86% to about US$23 billion. 

“We’re looking at ways in which clients can recycle that capital into long-term bond markets like ABS and project bonds, as has been done globally,” said Richard Satchwell, Barclays’ head of capital markets financing for Asia-Pacific. “The bank market can’t absorb the quantum of liquidity that’s likely to be required in the data centre space.”

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