Business Models and Finance to Enhance Energy Efficiency in AI and Data Centres in Emerging Economies

The report examines the accelerating energy demand driven by AI and data centre growth in emerging economies. While digital infrastructure is essential for economic development, its energy footprint poses serious risks to grid stability, affordability, and climate objectives. Global data centres consumed approximately 460 TWh in 2022, and this figure could surpass 1,000 TWh by 2026 as AI workloads expand. The brief argues that energy efficiency must become a cornerstone of digital transformation, supported by innovative business models and targeted financial instruments. By integrating efficiency measures and climate-aligned financing, emerging markets can achieve sustainable digital growth without compromising energy access or environmental goals.

The Challenge

Emerging economies face a dual pressure: the need to scale digital infrastructure rapidly while managing fragile power systems and meeting climate commitments. AI-driven data centres are highly energy-intensive, and without intervention, their growth could overwhelm electricity grids, increase operational costs, and undermine emissions targets. Regulatory gaps, limited financial incentives, and outdated infrastructure exacerbate the problem. Many countries lack standardized energy efficiency frameworks, making it difficult to monitor and optimize consumption. Furthermore, legacy facilities often operate with poor Power Usage Effectiveness (PUE), and extreme weather events add resilience challenges. These factors collectively create a high-risk environment for sustainable digital expansion.

Opportunities for Action

The report identifies a pathway to balance digital growth with sustainability through integrated strategies. Energy efficiency solutions such as advanced cooling technologies, AI-optimized workload management, and retrofitting legacy systems can significantly reduce energy intensity. Innovative business models—including Energy-as-a-Service, AI-as-a-Service, and outcome-based pricing—offer scalable approaches to align operational costs with energy performance. Financial instruments like green bonds, sustainability-linked loans, and blended finance mechanisms can unlock capital for efficiency upgrades and new infrastructure. Governments and development institutions play a critical role in embedding energy efficiency into national digital strategies, de-risking private investment, and building local capacity for green IT operations. Together, these measures can transform data centres from energy liabilities into drivers of sustainable development.