Saudi Arabia’s AI and cloud expansion could require up to $42bn in project capital by 2030, including $32bn in debt, if about half of the announced data centre capacity is delivered, according to Alvarez & Marsal.
The kingdom’s installed data centre capacity is forecast to grow from 410MW to about 1GW by 2030 under the firm’s base case. Kurt Davis Jr, Alvarez & Marsal’s head of debt and capital advisory for the Middle East and Africa, said financing itself is unlikely to be the main constraint.
The bigger challenge is making projects financeable by securing long-term customers, allocating construction risk and demonstrating how debt will be repaid. An investment-grade or sovereign-linked customer taking 60% to 80% of a facility’s capacity could significantly improve available leverage and pricing, he said.
Saudi banks could provide between $3.5bn and $7bn of debt, while the broader pipeline would require regional and international lenders, institutional investors and capital markets. Potential structures include construction finance, term debt, sukuk, private credit and longer-term institutional capital.
According to Davis, the base-case 1GW build-out is financeable. The key variable is how quickly projects move from announcements to developments ready for lenders, rather than a shortage of capital.
Source: AGBI
