Asset finance and the rising cost of building digital infrastructure

Want to know what is really holding up the data centre boom?

It’s not chips. It’s not land. It’s cash – and the electrical gear that cash is used to purchase well before the first server is turned on.

Developing digital infrastructure is among the costliest investments a business will make. Past budgets that once seemed reasonable now seem laughable. Lead times on power equipment lengthen. The gap between project needs and balance sheet capacity widens each quarter.

The good news?

Asset finance has become the silent facilitator to ensure these projects continue to operate. Combine that with effective condition monitoring and you alter the risk profile for lenders and operators.

Here’s what’s coming up:

• Why Digital Infrastructure Costs Keep Climbing
• How Asset Finance Fills the Funding Gap
• Where Partial Discharge Monitoring Fits In
• Protecting the Value of Financed Equipment

Why digital infrastructure costs keep climbing

It’s difficult to comprehend the magnitude of spending today. BloombergNEF reports that capital expenditure among the fourteen largest data centre operators alone will approach $750 billion in 2026, compared to just under $450 billion the previous year.

That is not a gentle increase. That is a step change.

But here’s the thing most coverage misses…

A massive proportion of that spend never hits a server. Think substations, transformers, busbars and switchrooms. The powergrid is the lowest performing, heaviest and most cap-ex intensive aspect of any build – and it’s also the one that doesn’t suffer failures silently.

Medium voltage equipment is everything downstream of your utility connection. If insulation within medium voltage equipment begins failing, your entire facility is at risk. It’s become such a concern that partial discharge monitoring has evolved from a value-added option to a requirement during new electrical asset design. Newer gas insulated medium voltage switchgear can even be purchased with partial discharge sensors installed from day one, allowing you to continuously monitor insulation condition rather than checking it once a year during a planned outage. By keeping moisture and dust out, sealed gas insulation also prevents two of the most common causes of partial discharge events.

Cost pressure is coming in with reliability pressure this year. The two coming together is what changes the nature of the financing discussion.

How asset finance fills the funding gap

Asset finance is easy to understand. Rather than pay for equipment all upfront, you pay for it over the period the equipment works for you.

Why does that matter so much here?

Digital infrastructure investment is cash flow negative for this reason. The tech gets purchased, installed and commissioned way before any revenues are realized. Paying cash depletes liquidity when you least want to.

Reaction has been swift. Equipment finance new business volume in the US reached a record $11.6 billion for one month alone at the beginning of 2026 – the largest monthly amount since the statistic was first recorded. Securitisation activity has accelerated just as rapidly, with issuance tied to data centres rising from $4 billion in 2020 to approximately $61 billion halfway through 2026.

There are a few structures that get used most often:

1. Finance leases – you record the asset on your books and build equity in it throughout the lease term.
2. Operating leases – ownership remains with the funder and you lease usage, not ownership.
3. Sale and leaseback – you release cash out of equipment you already own.
4. Asset-backed lending – the equipment itself secures the debt.

Each one displaces risk in a different place. And each one of them relies on the same silent expectation: that the equipment will still function, and have value, at term’s end.

That assumption is where monitoring earns its place.

Where partial discharge monitoring fits in

Partial discharge is the precursor to insulation failure. Tiny electrical sparks occur inside voids, cracks or contaminated surfaces within medium voltage insulation. They’re small. Invisible. But they quietly eat away at the insulation until it fails.

Partial discharge monitoring involves locating and observing that activity while equipment is energized with sensors that detect the electromagnetic, acoustic or electrical emissions generated by the discharges.

Here’s why that matters to a financed asset:

A failure doesn’t just cost a repair bill. It takes your site offline. According to the Uptime Institute, 57% of major outages cost operators upwards of $100,000. Every five outages, one costs over $1 million. Electrical issues continue to top the list.

Place these two facts next to one another. Capital equipment paid for over a five to ten year period. A failure mode that can erase a year of margin in one afternoon.

What partial discharge monitoring actually watches for

Continuous partial discharge monitoring deals with patterns of activity, not individual events. Ideally you want to monitor:

• Discharge levels and how they trend over weeks and months
• Where in the switchgear the activity is coming from
• Whether humidity or temperature is driving the change
• Any sudden jump that suggests a defect is growing

That information provides maintenance personnel with an excuse to pop open a panel — or not mess with it. Either can be useful. Closing down equipment unnecessarily also costs dollars.

Cool, right?

Protecting the value of financed equipment

Here’s something a lot of operators overlook…

When you lease equipment, someone else cares about asset condition too. The funder does. Residual value is at the heart of nearly every lease calculation. And residual value is merely a prediction about how well maintained the asset will be in the future.

Partial discharge monitoring takes that assumption and provides proof. With a known insulation history, you now have three benefits:

• It supports the residual value – condition data allows you to defend your end-of-term value much easier.
• It reduces the perception of risk – investors factor uncertainty into every transaction, evidence mitigates risk.
• It protects the payment schedule – an asset that is operational continues to produce the income needed to service debt.

There’s an asset maintenance perspective as well. By using condition-based monitoring you can schedule work to suit load rather than scrambling to respond to a fault in the middle of the night. The difference between scheduling a task versus a panicked callout with months lead time on replacement.

Bringing it all together

Digital infrastructure build-out costs aren’t going back down. Demand is surging, equipment is constrained, and capital needed is reaching new highs.

Asset finance is how most projects will bridge that gap.

Financing an asset does not make it dependable, however. That still falls under specification and monitoring:

• Choose electrical equipment designed for the environment it will live in
• Build partial discharge monitoring in at design stage, not after a scare
• Track insulation condition continuously rather than annually
• Keep the records – funders, insurers and buyers all want them

Complete that and the equipment retains value, the site operates, and the financial package does what it was designed to do. Neglect that and you end up spending money on an asset that ceased operating well before the last payment went through.