Nippon Life plans US$12.75 billion in data centre project finance in US and Japan

Japan's Nippon Life Insurance plans to invest 2 trillion yen (US$12.75 billion) in infrastructure financing, mainly for data centre construction in the United States and Japan. The insurer is pursuing project finance arrangements that offer spreads above 2 per cent on average, and aims to double its

Japan's Nippon Life Insurance plans to invest 2 trillion yen (US$12.75 billion) in infrastructure financing, including the construction of data centres in the United States, Nikkei Asia reported on Sunday.

Nippon Life intends to use the capital through project finance arrangements, under which loans are repaid using cash flows generated by the underlying projects, the report said. The insurer sees US project-finance investments as offering attractive spreads of more than 2 per cent on average, while helping to diversify its investment portfolio.

Nippon Life is also weighing loans for data centre projects in Japan by the end of fiscal 2026 and aims to double its outstanding balance to 2 trillion yen by fiscal 2035 by adding new projects at a pace exceeding repayments, the report added.

Japan is among the hottest markets for global private capital, experiencing a wave of private equity-led mergers and acquisitions and real estate deals in recent years. While Japanese firms have long exported capital abroad in the face of sluggish domestic growth, the return of inflation has prompted a surge in growth investments at home, while higher interest rates and growth opportunities in areas such as data centres and logistics are making Japanese assets more attractive.

Reuters could not immediately verify the report. Nippon Life Insurance could not be immediately reached for comment.