Financing boost for digital economy

Aug 10, 2026

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PETALING JAYA: The world’s first green sukuk developed for data centre (DC) infrastructure could pave the way for more sustainable financing of digital infrastructure projects, according to the Asian Development Bank (ADB), which says the deal demonstrates how Islamic finance can support a growing digital economy.

In late June, Sime Darby Property Bhd or SimeProp subsidiary, Sime Darby Property NEV (Holdings) Sdn Bhd, established a RM2.6bil sukuk programme to finance the development of build-to-suit DCs as well as industrial and logistics assets.

ADB is committing up to RM300mil in the green sukuk, marking the multilateral lender’s first Islamic finance investment.

It is also ADB’s first transaction with a wholly Malaysian-owned group since its re-entry into Malaysia.

Daniel Wiedmer, infrastructure finance director in the ADB’s private sector operations department, said Malaysia’s growing demand for digital infrastructure presented a timely opportunity for the bank to support the country’s growth while contributing to a more sustainable capital market.

“For us, it is not just about financing a single project but demonstrating how to fund next-generation infrastructure in an innovative and scalable way – creating a model that others can replicate,” he noted in an email interview with StarBiz.

Wiedmer said the transaction demonstrated how Islamic finance could be mobilised to meet the growing demand for sustainable digital infrastructure while enabling large-scale projects to tap a broader and more diverse pool of investors beyond traditional bank lending.

“This is especially important for South-East Asia, where demand is growing rapidly and where practical, replicable financing models will be essential to support the next phase of digital development,” he said.

He noted that the green sukuk showed that hyperscale DCs could be financed in a way that supports both economic growth and climate objectives. “The transaction introduces an innovative financing model that combines internationally recognised green finance principles with a financing structure that is aligned with domestic investment preferences and capital market practices,” he said.

According to ADB, the sukuk qualifies as a green instrument under international sustainable bond standards as the DCs are designed to be energy-efficient and environmentally sustainable.

Wiedmer said a DC’s eligibility for green financing is determined by the transaction’s green financing framework.

“To qualify, the project must meet the framework’s defined environmental eligibility criteria, which typically include measures to improve energy efficiency and environmental performance, as well as robust governance and reporting requirements,” he noted.

Under the sukuk programme, Sime Darby Property will use the proceeds to part-finance the development of hyperscale DCs at Elmina Business Park.

The DCs are supported by a 20-year lease with a multinational technology company.

The proceeds will also be used to part-finance a build-to-suit distribution warehouse equipped with automated storage and retrieval systems in the City of Elmina, which is supported by a 15-year lease with a local hypermarket operator.

Besides ADB, Maybank Islamic Bhd and OCBC Al-Amin Bank Bhd have also committed to invest in the sukuk, while the Credit Guarantee and Investment Facility (CGIF), an ADB trust fund, is providing a partial guarantee.

ADB acted as joint sustainability structuring adviser with Maybank Investment Bank Bhd, helping to develop the issuer’s green finance framework and sustainability structuring for the sukuk.

The framework is aligned with recognised green finance standards, including the Asean Green Bond Standards by the Asean Capital Markets Forum, the Green Bond Principles by the International Capital Market Association and the Securities Commission’s sustainable and responsible investment (SRI) sukuk framework.

Wiedmer said ADB’s investment supported the bank’s broader goal of accelerating digital transformation across South-East Asia by helping expand infrastructure related to cloud computing, artificial intelligence and other digital services.

The transaction is also aligned with ADB’s Asia-Pacific Digital Highway initiative, which aims to mobilise US$20bil by 2035 to finance digital corridors, data infrastructure and AI-ready economies.

“Ultimately, we are not just building infrastructure – we are making markets investable so that private capital can drive sustainable, inclusive growth across the region,” he said.

Wiedmer said Malaysia’s well-established sukuk market, strong Islamic finance ecosystem and experienced market participants enabled a transaction of this nature.

As Malaysia strengthens its position as a regional digital hub, he said investments in large-scale data infrastructure would become increasingly important, although projects of this scale require substantial capital and innovative financing solutions to attract private investment.

To accelerate the adoption of green sukuk and other sustainable financing solutions across South-East Asia, he said continued development of market infrastructure would be essential.

“This includes supportive legal and regulatory frameworks, clear market standards, and appropriate incentives to encourage issuers while providing confidence to investors,” he said.

He added that ADB could support market development by mobilising capital, sharing technical expertise and working with governments and market participants to strengthen the enabling environment for sustainable finance.

ADB is a multilateral development bank founded in 1966 and owned by 69 members, including 50 from the Asia-Pacific region, financing growth across the region.

The transaction comes as Malaysia continues to strengthen its position as the world’s largest sukuk market.

Fitch Ratings said Malaysia’s debt capital market (DCM) exceeded US$610bil outstanding as at end-May 2026, with sukuk accounting for around 60% of the total.

Malaysian issuers also represented about one-third of global sukuk outstanding at US$363bil.

Total Malaysian DCM issuance exceeded US$45bil in the first five months of 2026, with sukuk accounting for 63% of total issuance, the credit rating agency added.

Fitch also noted that most rated Malaysian sukuk were more liquid than those issued in most other markets and expects Malaysia to retain its position as the world’s largest sukuk market in the second half of 2026.

Article By KIRENNESH NAIR

Source: Financing boost for digital economy (Monday, 10 Aug 2026). The Star. Retrieved from https://www.thestar.com.my/business/business-news/2026/08/10/financing-boost-for-digital-economy

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Financing boost for digital economy

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