ADQ Partners with ECP to Develop Energy Projects

ADQ, an active sovereign investor with a focus on critical infrastructure and global supply chains, and the US-based Energy Capital Partners (ECP), the largest private owner of power generation and renewables, on Wednesday signed an agreement to establish a $25 billion (50-50) partnership across 25 GW worth of projects.

The combined initial capital contribution from the partners is expected to be $5 billion. The primary geographic focus of the projects will be the US but a portion of the capital may also be allocated towards opportunities in selected other international markets.

Combining ADQ’s proven expertise in infrastructure investments with ECP’s premier energy investment platform in electrification and power and renewable generation, the partnership aims to service the growing power needs of data centers, hyperscale cloud companies and other energy-intensive industries.

As the continuity and quality of power supply is crucial for these high-growth industries, the need for captive power plants that are in proximity is often a pre-requisite. The partnership is focused on meeting these needs over the long-term, with its mandate including greenfield development, new build and expansion opportunity projects that will establish it as a leader in power generation for a growing American economy.

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 centers and industrial electrification.

In the US, a strong increase in electricity demand is expected to add the equivalent of California’s current power consumption to the national total over the next three years.

Recent research forecasts that global power demand from data centers will increase by 50% by 2027 and by as much as 165% 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 center load growth has tripled over the past decade and is projected to double or triple in the next three years.

Meeting Power Demand

ADQ’s Managing Director and Group CEO Mohamed Hassan Alsuwaidi said that the acceleration of AI and its societal adoption presents attractive opportunities to serve the power and infrastructure needs of data centers and hyperscalers.

He said that ADQ has been an active investor with a sharp focus on critical infrastructure and proven capability in building long-term partnerships, and they were in a prime position to help address these shifting structural dynamics.

ECP Founder and Executive Chairman ‍Doug Kimmelman said that AI will be a major driver of the 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 center 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,” he said.

ADQ manages over 25 portfolio companies across more than 130 countries, operating across key sectors of Abu Dhabi’s rapidly transforming economy, including 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.