American private equity firm I Squared Capital has expressed openness to participate and invest in the country’s growing data center industry, but only after the government introduced data reforms seen boosting the sector’s demand.

I Squared Capital Chairman Sadek Wahba said data centers are not yet part of the firm’s investment plan in the Philippines, although he noted that it could be a “very attractive” sector.

The Miami-based investment manager is mounting a massive $2-billion investment effort in the country, covering critical sectors such as energy, transportation, digital connectivity, and logistics.

With over $50 billion in assets, I Squared Capital has been investing in the development and expansion of data centers in other countries. 

The company is ramping up investments in these facilities, which are at the forefront of the artificial intelligence (AI) boom and the rise of other emerging technologies, to support its upward trajectory.

In Southeast Asia, Wabha said it has invested in companies operating data centers in Indonesia, Malaysia, and Singapore.

These countries continue to attract billions of dollars in investment into their respective data center sectors, thanks to data localization or sovereignty policies in place.

These policies, in their essence, ensure that data is stored within a country’s borders, especially highly sensitive information that deals with national security.

Without such a reform, Wahba noted that a huge chunk of the Philippines’ data is stored elsewhere.

“To the extent that the government introduces requirements to bring in that insight, depending on the nature of the data and so on, I think that will meet the need for more data centers,” Wabha told reporters last week.

He also said that part of the challenge in investing in data centers is the large-scale effort it would need to build the infrastructure around the facility, alongside concerns about power costs.

Wahba noted that he had relayed some of these concerns to President Marcos, who, he said, agreed with his assessments during their meeting at Malacañan Palace last week.

“I think the government here is doing a very good plan at understanding all of the components that are needed,” he said.

Meanwhile, I Squared Capital is also keen to participate in the government’s push to let the private sector handle the operations of big-ticket transport projects through a public-private partnership (PPP) arrangement.

“We are very keen to look at these opportunities,” said Wahba, without providing other details.

I Squared Capital’s portfolio of companies includes Indian tollway operator Cube Highways and Colombian port terminal operator SPRB Group.