As global tech giants race to expand capacity in India, the National Investment and Infrastructure Fund (NIIF) is sharpening its strategy around the backbone of that growth—data centres powered by reliable, renewable energy. Through its second Master Fund, the quasi-sovereign investor is backing an integrated approach that links power sourcing with digital infrastructure, aiming to position itself for the country’s long-term, AI-led demand surge.
“There are a lot of interdependencies between power reliability, grid reliability, renewable sourcing and data centres as a whole,” Vinod Giri, managing partner–Master Fund at NIIF, told Mint. “That cross-sector perspective informed the design of the BOM campus from the outset.”
The BOM campus is NIIF's initial investment in the data centre segment, which was through a joint venture with data centre platform company Digital Edge and global asset development company AGP Sustainable Real Assets back in 2023. The three firms committed $2 billion to build out a 300-megawatt hyperscale facility in Navi Mumbai.
India is seeing an influx of large tech players and conglomerates rushing to build in the country. Since last year, Amazon, Google and Microsoft have all committed to build large AI-driven data centres in India. Companies such as NTT Data, Yotta, Sify Infinit Spaces, RelianceJio, among others, are also building data centres in India.
There's also policy tailwind, with the government proposing zero tax until 2047 for foreign cloud service providers with global clients, provided they use data centres services from India.
NIIF's data centre play is rooted in how the country's demand for digital infrastructure has grown over the last couple of years, especially since AI became mainstream. “We're one of the faster adopters of AI across different industries today,” said Giri. “In India, the demand for data centres is structural and long term. For NIIF, the combination of scale, duration and national importance is exactly what makes it a sector we would want to invest in.”
India's data centre market is expected to grow significantly over the next five years. According to Mordor Intelligence, its installed base is expected to grow from 5.45 gigawatt in 2026 to 15.21 gigawatt by 2031, at a compound annual growth rate of 22.7%.
But for NIIF to make an investment in a data centre company, it needs to have some visibility on its direction even if the fund has to come in early and pick up a controlling stake. It prefers to invest in companies that have a strong pipeline of customers, robust contractual framework, dispute resolution mechanisms and security payment mechanisms secure payment mechanisms. “They should ideally have long-term agreements with hyperscalers,” Giri said.
Digital Edge JV
The data centre investment is being executed through a joint venture with Digital Edge, which has signed a power purchasing agreement (PPA) with renewable energy company Hexa Climate and has picked up a 26% equity stake in the company. The PPA is structured such that Hexa will provide 83MW solar power to the former's Navi Mumbai data centre. The extra power is expected offset about 100,000 tonnes of carbon dioxide emitted by the centre, according to Digital Edge. The data centre will also be liquid-cooled by using 10 million litres of recycled water per day.
Power for the data centre will initially be delivered in December this year and ramped up to the full 83MW as more of the data centre goes online. “Our first building in Navi Mumbai was ready towards the end of last year. The next one will be ready for service by Q4 this (calendar) year, with the third one starting operations by Q3 in the next year,” said Digital Edge group chief executive John Freeman.
The Singapore-based firm was founded in 2019 and operates 24 facilities across across China, Indonesia, Japan, Korea, and the Philippines.
The Indian arm of the business is eyeing expansion, Freeman said. “Our expansion here is largely driven by customer demand. We have around four active conversations going on at the moment.”
Digital Edge said it is keen on investing more capital in the country to expand the business here, given that digital infrastructure build out in the country is progressing at a rapid pace.
“India has the possibility to become one of our largest sources of revenue since it is growing fast. Our other markets are growing fast, if not as fast as India,” said Freeman. “It really comes down to where customers deploy and I think, given the policy tailwinds in India, the country is well-positioned to capitalize on that growth.”