Against the backdrop of surging demand for data center development, industry participants are closely examining how projects are financed and when different sources of capital step in. As discussed during a panel at Hart Energy’s Energy Capital Conference, the availability of power and execution track record are emerging as key inflection points that determine when lenders become willing to participate alongside equity sponsors.
Bracewell’s Hans Dyke said the first chapter of data center power infrastructure is being underwritten almost entirely by sponsor equity, not lenders.
“I think it’s overwhelmingly still sponsor equity,” he said, adding lenders are hesitant to take on the earliest exposure. “The lenders are not going to take on their permitting risks and zoning and your classic development risks.”
