A new trade association formed to represent home-grown Irish companies operating in the data centre supply chain has pledged to change the mood music on the sector, claiming the benefits of such facilities are “largely ignored”.
The Irish Data Centre Supplier Alliance will represent companies across planning, design, construction, mechanical and electrical engineering, energy management, automation and technical services that have benefited from data centre investment in Ireland.
The group said it has been established to demonstrate the sector’s value to the economy, engage with policymakers and communicate how data centre investment supports economic activity and the growth of indigenous Irish firms.
Tom Parlon, the former director general of the Construction Industry Federation and a former minister of State in the Department of Finance, will become the first chairman of the group.
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“The growth of the data centre industry over the past 15 years has been one of the foundations of Ireland’s economic recovery since the financial crash,” he said.
“The sector has contributed over €20 billion through direct and indirect investment during that time, directly employing 1,800 people whilst supporting thousands more jobs across the Irish supply chain.
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“Data centre investment has also been a vital avenue of growth for Irish business, allowing many companies to evolve into a new generation of multinationals and establishing Ireland as a global leader in the provision of digital infrastructure services.”
Mr Parlon said it was “unfortunate” the debate around data centre investment in Ireland has become “deeply polarised” over recent years with the benefits to domestic businesses “largely ignored”.
The group has called on the Government to begin developing a number of islanded utility business parks in strategic locations, which would be “large-scale campuses with utility-scale energy and water capacity developed on site to meet next-generation FDI investment”.
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Meanwhile, a data-centre landlord leasing to the operators of the artificial intelligence matrix has secured the highest credit grade from one of the top three ratings firms for the first time.
Some $500 million (€423 million) of Compass Datacenters LLC’s latest $830 million asset-backed securitisation carries a AAA rating from Moody’s Ratings.
The highly rated debt was able to secure a rate of 1.2 percentage point above its benchmark on Wednesday, after initial talks of about 1.25 to 1.35 percentage points.
It’s the first time either S&P Global Ratings, Moody’s or Fitch Ratings has handed out a triple-A rating to a data-centre ABS deal, although Morningstar DBRS, a smaller credit-grading firm, has assigned previous Compass offerings its highest rating.
Getting such a stellar grade from one of the big three ratings companies means the company selling the debt can secure financing at a lower cost than what’s typical for other asset-backed deals.
Data-centre developers are seeking credit ratings – even while facilities are still under construction – as the tech industry tries to open up new sources of capital to fund hundreds of billions of dollars in AI investments.
S&P, Moody’s, Fitch and Kroll Bond Rating Agency have in recent months expanded their coverage to data-centre projects that are yet to be completed, and in many cases given out private ratings for loans so that banks can offload them to a broader base of institutional investors.
Having the stamp of approval from ratings agencies is particularly important for these colossal data-centre buildouts, which have overwhelmed the project finance market and need to attract new classes of investors, such as insurance companies, that can buy into only high-grade deals rated by the big three agencies. – Additional reporting: Bloomberg and The Financial Times
