Global digitalization and the rapid advent of artificial intelligence are two phenomena that have in recent years thrust data centers – the physical infrastructure supporting digital data – into the spotlight. At least one Brazil-based firm looks well-positioned to take advantage of it.
Founded barely five years ago, Scala Data Centers has managed a successful pivot into the arena. CEO Marcos Peigo recalls that the company started out focusing on cloud computing. But following the dramatic acceleration in digitalization during the Covid-19 pandemic, it became clear to him the firm’s future lay in hyperscale data centers.
As part of that effort, the company successfully issued R$1billion last November in 6-year green debentures in a transaction that aims to support the company’s continued investment in one of the world’s fastest growing infrastructure markets. The deal marked the third such issuance by Scala and was the second largest green issuance in Brazil’s data center sector; the top spot was taken by an earlier Scala issuance in December 2022, notes Stocche Forbes, the Brazilian law firm.
“[The deal] has enabled us to work with bigger and longer contracts where our buildings are customized for each client,” he says. “When we started, our goal was to have 70MB of capacity at the end of eight years. We ended up reaching 160MB last year.”
He says that from the outset, Scala has made carbon neutrality in its operations a priority; the company only uses energy from renewable sources. That commitment has enabled it to naturally integrate its capital markets financings into a green framework that has proved attractive for investors.
“All our green debentures were more than three times oversubscribed,” Peigo says. “We have had to deal with the good problem of applying a haircut to the issuances in order to better accommodate all the interested parties.”
More importantly, perhaps, is that Scala is preparing itself to keep on attracting investment from a growing pool of market players that increasingly want to allocate their money to sustainable assets.
“The trend is that, at some point, there will be less money for assets that are not green,” says CFO Clayton Malheiros. “We will have an advantage then because we have already started in this line.”
He has no doubt that the road ahead leads to tapping sustainable sources of capital, not the least because the very banks that help to structure deals are much focused on the matter.
“Before we present a proposal, they are already asking if the issuance will be green or not,” Malheiros says. “It all helps generate appetite in the market for a relatively young company like ourselves.”
In addition to Brazil, Scala also operates in México, Chile and Colombia. The company does not rule out the possibility of tapping international capital markets for future investments.
Scala Data Centers Green Debentures
R$1.07 Billion Financing
Underwriters: Banco Bradesco BBI, UBS Brasil
Underwriters’ Counsel: Machado Meyer
Sponsor’s Counsel: Stocche Forbes
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