Abu Dhabi's ADQ to partner ECP in $25bn investment in the US energy infrastructure
ADQ (formerly Abu Dhabi Developmental Holding Company), the Abu Dhabi-based sovereign investment company, will partner with the New Jersey-headquartered Energy Capital Partners (ECP) to build power generation and energy infrastructure with capital investments of more than $25 billion across 25GW worth of projects.
ADQ and ECP have entered into an agreement to establish a 50-50 partnership for this. The partnership combines ADQ's expertise in infrastructure investments with ECP's premier energy investment platform in electrification, power, and renewable generation. It aims to service the growing power needs of data centres, hyperscale cloud companies, and other energy-intensive industries.
ADQ-ECP collaboration
Captive power plants in close proximity to data centres are often a prerequisite for these high-growth industries, as an uninterrupted power supply is critical to their functioning.
The mandate includes greenfield development, new build and expansion opportunity projects that will establish the partnership as a leader in power generation for a growing American economy.
The partnership's primary geographic focus of the projects will be the USA, but a portion of the capital may also be allocated towards opportunities in selected other international markets. The combined initial capital contribution from the partners is expected to be $5 billion.
Mohamed Hassan Alsuwaidi, Managing Director and Group Chief Executive Officer of ADQ, commented: 'The acceleration of AI and its societal adoption presents attractive opportunities to serve the power and infrastructure needs of data centres and hyperscalers. Meeting these power needs presents evolving challenges for governments worldwide in ensuring secure, stable, and commercially competitive electricity supply.
'As an active investor with a sharp focus on critical infrastructure and proven capability in building long-term partnerships, we are in a prime position to help address these shifting structural dynamics.
'Our partnership with ECP allows us to invest meaningfully in generation and related infrastructure assets that support accelerating demand for power, promoting the progress of these industries and helping to future-proof economies.'
Supporting data centres' growth
According to a recent report by the International Energy Agency (IEA), the world's electricity consumption is forecast to rise at its fastest pace in recent years. This surge is in part driven by the growing needs of data centres and industrial electrification.
Recent research forecasts that global power demand from data centres will increase by 50 per cent by 2027 and by as much as 165 per cent by the end of the decade, driven by the expansion of AI and high-density data centers. The US Department of Energy estimates that data centre load growth has tripled over the past decade and is projected to double or triple by 2028.
Doug Kimmelman, ECP's Founder and Executive Chairman, added: 'AI will be a major driver of US economic and job growth over the coming decade, but not unless ample new electricity supplies are developed.
'We are honoured to build an investing partnership with ADQ to provide the electricity resources demanded by the rapidly growing AI data centre sector where the build out of new power generation resources or 'additionality' in the US will require significant, patient capital with a long-term horizon.
'Given the tightening supply/demand dynamics in US power markets, new generation capacity will be needed and our focus in this partnership will therefore primarily be on new-build natural gas-fired power generation assets in scale to meet the needs of hyperscalers on a timely basis.'
ADQ manages over 25 portfolio companies across more than 130 countries, operating across key sectors such as energy and utilities, food and agriculture, healthcare and life sciences, and transport and logistics. Infrastructure investments have been at the core of ADQ's mandate since it received its first asset transfers from the Government of Abu Dhabi, which included major power and water companies. The company's total assets amounted to $225 billion as of 30 June 2024.
ECP, founded in 2005, has established itself as a leading equity and credit investor in energy transition infrastructure. Its portfolio includes investments in power, renewables, storage, sustainability, and decarbonisation infrastructure. ECP has owned, controlled, and operated over 83GW of power generation across all major US power markets.
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