Indian Project Financier’s Data Center Loans Top $1.2 Billion

India’s top state-run infrastructure financier has sanctioned loans upwards of 30 billion rupees ($313 million) each to at least four data centers, reflecting the nation’s push to participate in the artificial intelligence buildout.

The facilities from the National Bank for Financing Infrastructure and Development, or Nabfid, have a moratorium of as much as five years, with repayment over the following 10 years, Managing Director Rajkiran Rai G. said in an interview.

Such projects generate “good” cash flows despite long construction periods, he said, adding that Nabfid has seen good traction from hyperscalers or large cloud services providers.

Demand for such loans signals growing corporate spending on large projects such as data centers in India. Global investors from EQT AB and Blackstone Inc. to Alphabet Inc., alongside local conglomerates like Adani Group, have also committed billions of dollars to set up AI compute infrastructure in the country.

Nabfid estimates that India’s data centers will need about 1 trillion rupees in funding through March 2031, according to its presentation.

The lender, which is looking to diversify borrowing sources, has readied its maiden dollar bond after the US Federal Reserve raised interest rates this week.

The lender plans to raise 1 trillion rupees in the year through March, with about 40% coming from overseas by end-December, Rai said.

Nabfid raised close to $1 billion in offshore loans under the central bank’s concessional window available till Dec. 31, and has mandated foreign banks to mobilize a 10-year dollar bond of a similar amount through the window by the end of this month, Rai said.