Financing sustainability: green loans are becoming a big deal for telcos
The financing world is changing, and one of the most significant shifts for the telecoms sector is the rise of the green loan. A recent headline-grabbing deal by AirTrunk, a hyperscale data centre operator, shows why this form of financing could become increasingly common across telecoms and digital infrastructure.
AirTrunk’s Landmark Green Loan
AirTrunk has just completed one of the largest sustainability-linked financing packages in the region — worth around US$10.4 billion. The deal blends green loans (where funds are earmarked for environmentally beneficial projects) with sustainability-linked loans (where borrowing costs depend on meeting ESG targets).
Highlights include:
A record-breaking green loan for a Singapore data centre.
The world’s first data centre loan to tie financing margins to a social impact programme.
Funding across Australia, Hong Kong, Malaysia and Singapore.
Crucially, the company has tied this financing to net-zero goals, renewable energy adoption, and water-efficiency measures.
What Makes a Loan “Green”?
A green loan is different from conventional debt. The money raised must go directly into projects with clear environmental benefits, for example:
Renewable power generation
Energy-efficient cooling systems
Sustainable infrastructure builds
This differs from sustainability-linked loans, which can fund general business activities but apply financial incentives (or penalties) based on ESG performance.
So what? Why Telcos Should Care
Telecoms operators and data centre providers are among the biggest energy consumers in the digital economy. That puts them under pressure from regulators, investors and customers to prove they are cutting emissions and improving efficiency.
Green loans offer a powerful tool to:
Lower financing costs – Companies that hit environmental targets can unlock cheaper debt.
Attract ESG-driven investors – Banks and funds are under pressure to direct capital toward green projects.
Meet regulatory demands – With governments tightening sustainability reporting rules, green loans show compliance and commitment.
Strengthen brand reputation – Raising capital under a “green” label signals credibility to customers, partners and communities.
Future-proof operations – Investments in energy efficiency and renewables reduce long-term risk from volatile energy markets or carbon taxes.
Challenges Ahead
Green finance does come with hurdles. Defining what counts as “green” isn’t always straightforward, and companies must prove their projects deliver measurable impact. Complex multi-country deals, like AirTrunk’s, also require careful structuring and transparent reporting.
But once frameworks are established, lenders and borrowers both benefit from repeatable models — making it easier for other telecom players to follow.
The Direction of Travel
AirTrunk’s massive deal sets a precedent: green loans are no longer niche. As data demand grows and the climate agenda intensifies, telecoms companies should expect more financing deals tied directly to sustainability outcomes.
For telcos, this isn’t just about ticking ESG boxes — it’s about securing competitive capital, staying ahead of regulation, and ensuring their infrastructure is fit for a low-carbon future.
Takeaway: Green loans are moving fast from novel to normal in telecoms finance. The companies that embrace them early will not only cut costs but also gain a powerful edge in credibility and sustainability leadership.
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