Adani to Invest $6B in Mumbai Area Data Centres in Coming Decade

Billionaire Gautam Adani’s flagship holding company has pledged to invest INR 500 billion ($6 billion) in developing and operating hyperscale data centres in India’s Maharashtra state over the next 10 years. 

Adani Enterprises, a member of the Adani Group, on Wednesday signed a memorandum of understanding with the government of Maharashtra to develop hyperscale data centres in key markets including Mumbai, its Navi Mumbai offshoot and the industrial hub of Pune, which could yield 1 gigawatt of capacity once operational.

The investment pledge comes as Adani Group and its partner, EdgeConneX, have been working with lenders to build a $600 million debt warchest to fuel their AdaniConneX joint venture, including the $400 million they are reportedly seeking to borrow offshore, with the India data centre platform having said in June that it aims to build a 1-gigawatt portfolio by 2030.

India’s digital infrastructure market is growing rapidly, with Mumbai having the second-largest pipeline of data centre projects under development globally, placing just behind Northern Virginia, according to a report by Cushman & Wakefield.

Debt Pile Grows

Adani Enterprises said it aims to use green power for the Maharashtra facilities, tapping the growing role of the state’s capital, Mumbai, in green energy production.

The firm signed the non-binding agreement with the Maharashtra government during the World Economic Forum last week, in the presence of chairman Gautam Adani, who ranks as India’s second-richest man, and the state’s chief minister, Eknath Shinde. 

“The Maharashtra government is interested in promoting information technology related infrastructure and services and considers the proposed hyperscale project to be economically and socially beneficial to the state,” the statement read.

As part of the same announcement, Adani said that its Adani Electricity Mumbai unit supplied 38 percent of Mumbai’s 2023 power requirements from renewable energy sources, and reaffirmed its commitment to push that proportion to 60 percent mark by 2027.

While the firm did not elaborate on its planned projects, the group has been ramping up fundraising to expand AdaniConneX, the hyperscale specialist which it owns 50:50 with Swedish private equity firm EQT’s EdgeConnex unit.

Bloomberg reported at the start of this month that AdaniConneX was negotiating with global creditors to raise up to $400 million to finance its growth plans this year, after it announced in June last year that it had raised $213 million for the construction of two data centres in the cities of Noida and Chennai. 

Backed by banks including ING, Mizuho Bank, MUFG, Standard Chartered and Sumitomo Mitsui Banking, the company’s first construction loan will partly finance the development of the 17MW first phase of its Chennai 1 campus and a 50MW campus in Noida, southeast of New Delhi.

Development Ramps Up

Adani joins the wave of global players and investors who kicked off 2024 with plans to grow their presence in India’s digital infrastructure sector.

Also last week, Reliance Industries — controlled by India’s richest man and Adani rival, Mukesh Ambani — teamed with partners Digital Realty and Brookfield Asset Management in completing their first project under their Digital Connexion joint venture. That project is the initial phase in a 100MW campus in northwestern Chennai’s Ambattur neighbourhood.

Earlier this month NTT Global Data Centers completed construction of its second facility in India’s National Capital Region – a 22MW facility in Noida.

Also this month, Singapore heavyweight CapitaLand Investment pledged to invest INR 11.5 billion in its ongoing 55MW data centre development project in Ambattur, Chennai.

India’s 1.4 billion population is one of the primary drivers of data centre demand in the country, especially among hyperscale tenants, according to Cushman & Wakefield.

Aside from Mumbai, where more than 550MW is under development, the property consultancy identifies Hyderabad as an emerging centre, with nearly 100MW in its pipeline.