DRIVERS AND DETRACTORS IN DIGITAL INFRASTRUCTURE
At ITW Asia 2024, the Investment Keynote Panel: Drivers and Detractors in Digital Infrastructure explored the opportunities and challenges associated with investing in digital infrastructure across the Asia-Pacific region.
Moderated by Damien Dujacquier, senior partner and head of TMT Southeast Asia at Roland Berger, the panel featured insights from leading financial and infrastructure experts: Andy Sutrisno of SMBC, Waleed Saraf of IFC, Kok-Chye Ong of Gaw Capital, and Matthew Goh of KKR.
The session covered a wide array of topics, including the growing demand for digital infrastructure, financing challenges, the evolving landscape of fibre and data centre investments, and the interplay between policy and sustainability.
Moderator & speakers
- Damien Dujacquier, senior partner and head of TMT South East Asia, Roland Berger (moderator)
- Andy Sutrisno, TMT sector coverage lead, APACxJapan, SMBC
- Waleed Saraf, principal investment officer, APAC TMT lead for infrastructure, IFC
- Kok-Chye Ong, managing director and head of data centre at Gaw Capital
- Matthew Goh, director of APAC infrastructure at KKR
Growing demand for digital infrastructure
Opening the panel, Dujacquier set the stage by emphasising the crucial role of digital infrastructure in connecting communities and driving economic opportunities.
Matthew Goh, representing KKR, highlighted the growth across multiple digital infrastructure sectors. He said: "You're seeing a lot of activity across the board—data centres, fibre, macro, and micro towers.
"Among these, data centres lead the way due to the size of investment required, followed closely by fibre given the low fixed penetration in some markets." Goh also noted that investment dynamics were shifting, particularly in Southeast Asia, where opportunities for cloud penetration are abundant.
He observed that while data centres dominated the past two years, sectors like terrestrial fibre, subsea cables, and tower sites are gaining traction as they support the broader connectivity ecosystem.
Challenges in scaling infrastructure
Kok-Chye Ong of Gaw Capital expanded on the challenges stemming from the ever-growing pace of digital transformation.
“AI has created an explosion in investment, particularly in building new data centres,” he explained. However, this rapid growth brings significant challenges, especially regarding sustainability and technological compatibility.
Ong said: “Every year, chip manufacturers introduce more sophisticated AI hardware, but building data centres takes three years. How do you ensure relevance and avoid obsolescence when the pace of technological change is so rapid?”
Sustainability emerged as a recurring theme. Ong noted that the surge in data centre construction places immense pressure on energy consumption, leading to a growing focus on renewable energy solutions.
He also pointed to trends like "BYOP" (Bring Your Own Power), where hyperscalers invest in independent energy sources, potentially reshaping energy strategies in Asia.
Data centre dominance
As expected, data centres dominated much of the discussion, with the panellists reflecting on their central role in digital infrastructure growth.
Ong expressed confidence in the sector’s long-term prospects, stating, "We’re only at the beginning. Growth will continue, driven by new use cases like AI, which requires specialised data centre infrastructure."
He elaborated on shifting consumption patterns, noting how applications like AI influence the location and design of data centres.
Ong also pointed to the return of telcos to the data centre space, reversing earlier trends of divestment. "Telcos are now investing in GPUs as a service and building new data centres, signalling a renewed focus on this asset class," he said.
The panel then delved into the financing landscape, with Andy Sutrisno of SMBC discussing the evolving sources of funding. He pointed out that the sheer scale of required investments had prompted a shift from local to regional and global financing.
"A few years ago, we dealt with data centre deals worth $50 million. Today, billion-dollar financing deals are not uncommon," Sutrisno said. However, he cautioned that financial institutions must exercise prudence to manage asset class concentration risks.
"While there’s no shortage of capital, the deployment must be strategic. Concentration on a single asset class, such as data centres, could pose risks in the long term." Waleed Saraf of the IFC highlighted how multilateral development banks (MDBs) like IFC play a complementary role to commercial banks.
He explained, "MDBs not only provide debt but also equity and mezzanine financing. For instance, we recently committed pre-contract financing for a data centre in Malaysia—a product not widely available elsewhere."
Saraf also underlined the IFC's focus on emerging markets, contrasting it with commercial banks’ preference for established regions.
“Our role extends beyond financing data centres in Malaysia or Thailand. We’re equally focused on enabling rural connectivity in the Pacific Islands or supporting data centre champions in Sri Lanka.”
Geopolitical challenges
Despite the optimism, the panel acknowledged significant challenges. Saraf highlighted macroeconomic risks, including inflation, interest rate uncertainty, and a strong US dollar, all of which could deter investment inflows.
Geopolitical tensions also loom large, influencing investment decisions in critical sectors like subsea cables and data centres.
“While geopolitics has spurred investments in recent years, concerns about conflicts and trade tariffs could impact future projects,” Saraf noted.
The environmental implications of large-scale digital infrastructure also surfaced as a challenge. Saraf cited a recent instance where the Malaysian government rejected data centre applications that failed to address sustainability, job creation, and water use impacts.
"Sustainability will increasingly be a pivotal factor in determining the viability of projects," he said. Saraf also noted an increase in duplicate investments in areas like subsea cables, driven by geopolitical uncertainties.
“We’re seeing more subsea cables duplicating existing infrastructure due to geopolitical headwinds. If diplomatic relations shift, what happens to these investments?” he queried.
Sutrisno elaborated on how financial institutions are adapting to this volatility. “We’re becoming more sensitive to geopolitical nuances, scrutinising fund flows and commercial agreements more closely.
"This isn’t just a checklist—it’s a fundamental question at every committee meeting,” he explained, acknowledging the unpredictability of policy changes but stressing the need for a balanced approach that supports clients while managing risk.
Sustainability and ESG considerations
A pivotal segment of the discussion revolved around the increasing role of Environmental, Social, and Governance (ESG) factors in digital infrastructure investments.
Dujacquier raised the question of how ESG priorities are reshaping the landscape, prompting a multi-faceted response from the panel. Saraf highlighted how data centre energy consumption is influencing renewable energy strategies in key markets.
“In Malaysia, the introduction of open access models for renewable energy procurement marks a shift driven by data centre demand,” he observed. Saraf cited India as a frontrunner in renewable energy adoption, with hyperscalers like Amazon and Google among the largest purchasers of corporate power purchase agreements.
Building on this, Ong outlined how ESG considerations are integrated at both project and macro levels.
From measuring the embedded carbon in construction materials to exploring emerging technologies like natural gas generators and fuel cells, sustainability is embedded in decision-making.
“It’s not just about operational metrics like PUE; we’re also aligning with investor and customer net-zero goals to combine data centres with renewable energy projects for a portfolio-level net-zero impact,” Ong explained.

Emerging trends: Fibre and towers
The conversation shifted to fibre and tower infrastructure, with Goh and Ong shedding light on recent trends. Goh noted the rising interest in fibre carve-outs, comparing them to the successful tower company model.
"Independent carve-outs allow carriers to secure capital while enabling shared usage models. Although fibre carve-outs are more complex due to ownership structures, they offer significant potential for efficiency and growth," he explained.
Regarding towers, Sutrisno observed that while markets like Indonesia are maturing, there is still room for growth in terms of geographical coverage and network density. He said: "South Asia has some catching up to do to match the network quality of more developed telecom markets."
Collaborative efforts and future outlook
The panel stressed the importance of collaboration among stakeholders, including policymakers, to address the challenges of scaling digital infrastructure.
Ong called for "out-of-the-box thinking" and regulatory support to promote alternative energy solutions. He suggested that industry players could work more closely with regulators to make options like hydrogen energy safer and more viable.
Saraf echoed this sentiment, highlighting how MDBs could bridge gaps in high-risk markets or underserved regions. “Our focus is not just on established hubs but also on enabling connectivity in less accessible areas,” he said.
Dujacquier prompted the panellists to share their observations on market activity and areas of potential growth.
Saraf noted that although much of the attention has been on data centres due to their significant volume, other sectors like fibre networks, subsea cables, and telecommunications towers also represent burgeoning opportunities.
"We are witnessing an increase in DC-to-DC connectivity, fibre expansion, and subsea cable projects, reflecting broader growth across the digital infrastructure ecosystem," Saraf said.
He highlighted Malaysia and India as current hotspots, with Thailand emerging as a promising new market for digital infrastructure investment, bolstered by recent moves by hyperscalers like GDS and ST Telemedia.
Kok-Chye Ong echoed Saraf’s optimism for data centres, pointing out the evolving nature of infrastructure needs.
He explained that future data centres will differ from today’s models, with investment focusing on regions equipped with robust resources like water, power, and skilled personnel.
Ong, meanwhile, emphasised the importance of ecosystem readiness: “It takes three years to train an engineer, and without adequate talent, project timelines and returns are severely impacted.”
Looking ahead to 2025, the panellists shared their priorities and predictions for the sector. Ong outlined Gaw Capital’s immediate focus on executing committed projects across five countries, with subsequent phases already in the pipeline.
“Delivering on time and budget is critical as we also keep an eye on emerging opportunities,” he stated.
Goh highlighted KKR’s successful recent investments and a forward-looking emphasis on supporting management teams to execute projects effectively.
"The growth trajectory requires high execution capabilities, and our role is to provide support wherever possible," he added.
Saraf, representing IFC, spotlighted the subsea cable sector as an area ripe for innovation and support.
“Independent developers are stepping up to meet the region’s subsea connectivity needs, and we’re exploring ways to intervene constructively,” he said.
Sutrisno predicted sustained high activity in greenfield investments and platform-level financing. He also flagged capital recycling as a burgeoning theme, driven by competitive capital influx into digital infrastructure.
"APAC is catching up to global standards in monetisation, and capital recycling will be key to sustaining this momentum," he said.
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