• Senior bankers are leaning towards projects in states seen as more receptive to data-centre development
  • Financing appetite remains strong, but local opposition is becoming part of lenders’ assessment before capital is committed

The fact

US banks and asset managers are looking more closely at local opposition when assessing loans for data-centre projects, Reuters reported. Several projects have faced delays or resistance from nearby communities, making local concerns a bigger part of lenders’ due diligence. Senior bankers said they are leaning towards projects in states seen as more welcoming to data-centre development, while remaining keen to finance the sector.

The scrutiny follows cases in which local opposition has affected development plans. Reuters reported in April that Amazon, Microsoft and Google had each abandoned multibillion-dollar data-centre construction projects amid community opposition. In July, opponents held 142 protests across 42 states as resistance to data-centre expansion spread nationally.

The assessment

Local opposition is entering financing decisions as well as planning and permitting. Senior bankers told Reuters they are examining community concerns when assessing project loans and leaning towards states seen as more welcoming to data-centre development.

Financing appetite remains strong. Reuters does not show that lenders are raising rates, reducing loan sizes or rejecting projects because of community resistance. Instead, lenders are looking more closely at whether local opposition could affect approvals and project timing before they commit capital. For BTW readers, site selection now carries a financing dimension. Projects in jurisdictions seen as more receptive may face fewer questions from lenders about whether local resistance could delay their path to construction.

What to watch

Watch whether lenders begin to favour projects in states with fewer local disputes, or change loan terms for sites facing opposition. Site moves, delayed financings or lenders stepping back from contested projects would be clearer signs that community resistance is affecting capital decisions rather than simply adding another due-diligence check.