A surprising result
The near 50% jump in global project finance volumes in 2025 was a surprise to say the least – although there were signs. In Q3 the figure was up 33%. But the usual end of year deal rush turned into a hurricane pushing the year-on-year increase up to 47%. Various themes can be detected, trophy projects identified but, in the final analysis, the big wave came in across the global beach.
Of course the growing data centre boom is one standout factor. Data centre project loans reached just over US$100bn in 2025 while data centre bond issuance was just shy of US$40bn. These figures compare with a much lower base in 2024. Corporate data centre sector issuance during the year was much higher on top of the project finance pieces and equity investment and equity valuations soared during 2025. But by year-end there was said to be some exhaustion across the debt capital markets in taking data centre debt.
The latest test will be the US$38bn project finance loan package backing two Vantage Data Center schemes where Oracle is the offtaker, the largest potential project finance loan in history. PFI has reported bank commitments are in but the deal timeline has slowed.
“Oracle, they are in the spotlight. This is interesting because they are an investment grade entity, but they’re having a tough time in the market because everyone is worried about potential downgrades of this credit,” said Ralph Cho, Co-CEO, Apterra Infrastructure Capital on the Norton Rose Fulbright Cost of Capital webcast last week.
Oracle is being sued by some investors in its September 2025 US$18bn bond who are saying the company failed to disclose just how much debt is needed to fulfil its data centre plans. On the equity side some investors in the Fermi America IPO in October are suing following the withdrawal of a potential tenant for the Texas scheme being planned by the start-up project company.
This week AI chipmaker Nvidia boosted the sector by putting US$2bn into customer CoreWeave. On Wednesday Microsoft and Meta will report earnings with presumably updates on AI data centre demand. Clearly a sector with great potential but one that is not now trending in an upwards direction.
The US and Asia Pacific were the main markets for data centre project finance loans in 2025 at US$75bn and US$23bn respectively. The US was additionally boosted by a massive US$50bn-plus jump in lending to the LNG sector following the election of president Donald Trump.
The Europe, Middle East and Africa market did not have the data centre or LNG rush. There was a mere US$10bn in loan deal flow. Indeed lending to the telecoms sector overall stagnated in EMEA at US$36bn. But the region still recorded a whopping 40% rise in loan volumes up to US$235.6m in 2025 – just shy of the US$254.5bn recorded in the US but not by much.
If not via data centres or LNG, how did the EMEA region manage to produce such a result? Power, of course, was a dominant sector although it was fairly dominant in the US too, notwithstanding data centres and LNG. Power sector loans reached US$110bn in 2025 in EMEA, up from US$71bn in 2024. That is quite a big increase at a time when the renewables sector has been hit by declining asset sales prices, increased costs and higher interest rates.
Developers are feeling the strain. This week German developer ABO Energy put a standstill in place with its creditors with losses of up to €170m due to “drastically altered market conditions".
The much derided offshore wind sector provided some oomph to the European figures with mega deals in both Poland and the UK. Lending to the wind sector reached US$45bn, by far outstripping the wind numbers elsewhere in the globe.
More to come? Apart from the UK, with its recent 8.4GW tender award and Poland, offshore wind has slowed down a tad in Europe. But this week at a North Sea summit, ministers from Britain, Belgium, Denmark, France, Germany, Iceland, Ireland, Luxembourg, the Netherlands and Norway signed an agreement to develop 100GW of offshore wind capacity in shared economic waters. One commentator suggested Europe was looking to reduce dependency on the US and, hopefully, to reduce renewable energy prices.
EMEA is a diverse region. Thermal power project lending totalled US$10bn as combined and open cycle schemes were financed in the Gulf. In addition there was a structured financing for the nuclear power scheme, Sizewell C in the UK. Oil and gas lending more than doubled as well to US$31.6bn. There were some LNG deals such as the Isle of Grain terminal in the UK but the deal activity was diverse.
Underlying the European figure there was plenty of asset refinancing – partly as the M&A market slowed due to lower valuation. Loans to the transportation sector nearly doubled to US$33.6bn in EMEA. When called on the large private equity players – the likes of EQT, CVC, KKR, Global Infrastructure Partners, Stonepeak etc – are still in the market to pounce for large scale buys. But the result of the Viridor sale with Equitix on path to a 50% stake is a sign of the times.
