Infrastructure status for data centres to help developers access cheaper finance: Experts

2/4/2022 1:58:00 PM

The government’s decision to award infrastructure status to data centres is expected to help developers access cheaper finance and also push investments into this segment, according to experts. Various state governments have already announced incentives for companies investing in data centres and have attracted investment from multinational companies. "The Budget announcement of giving infrastructure status to DC and energy storage systems is a long-standing ask of DC firms and a much-needed step in the right direction,” said Vivek Dahiya, managing director-India lead, data centre at Cushman & Wakefield. “It couldn't have come at a better time as there is tremendous growth being witnessed in this sector and steps like the roll out of 5G and data localisation will only further augment demand for DCs in India." Continued growth in data centres globally has led to an ever-growing development pipeline in India. According to a Cushman & Wakefield report, the hyperscale cloud revenue globally for 2021 stood at $124.7 billion, out of which, India accounted for $3.8 billion in revenue. Data centre parks will also lead to various information technology and related units coming up in the vicinity and generate employment. "As we transit into the age of Digital India, granting infrastructure status to data centres is a shot in the arm,” said Niranjan Hiranandani, CMD at Hiranandani Group. “It brings data centredevelopment on a par with other major sectors to avail long-term and cheap credit, bolstering data localization in the wake of protection of data sovereignty in the age of globalisation." Experts say the government’s move will boost India’s ambition of being a strong data centre player in the region. "We expect that 2,500MW of new data centrecapacity will be needed by 2026 in India," said Shishir Baijal, chairman and managing director, Knight Frank India. Uttar Pradesh, which already has a data centrepolicy in place, expects the data centre sector to generate direct employment for 4,000 people and indirect employment for another 20,000. While the Centre has prepared a draft of a datacentre policy, Telangana is another state that has a data centre policy. Source: The Economic Times