Abu Dhabi’s ADQ, a sovereign investment company formerly known as Abu Dhabi Developmental Holding Company, has announced a significant partnership with Energy Capital Partners (ECP) based in New Jersey. The collaboration aims to invest over $25 billion in developing power generation and energy infrastructure, targeting projects totaling 25 gigawatts (GW).

This 50-50 partnership combines ADQ’s expertise in infrastructure investments with ECP’s established energy investment platform, focusing on electrification, power, and renewable generation. The initiative is designed to meet the increasing electricity demands from data centers, hyperscale cloud companies, and other energy-intensive industries.

The partnership will emphasize the development of captive power plants close to data centers, which are crucial for ensuring an uninterrupted power supply. The agreement encompasses greenfield development, new construction, and expansion projects, positioning the partnership as a potential leader in power generation within the growing American economy.

While the primary geographic focus for the projects will be the United States, there are plans to allocate some capital toward selected international markets. The initial capital contribution from both partners is anticipated to be around $5 billion.

Mohamed Hassan Alsuwaidi, Managing Director and Group Chief Executive Officer of ADQ, stated that the rise of artificial intelligence (AI) presents significant opportunities to address the power and infrastructure requirements of data centers and hyperscalers. He emphasized the need for secure, stable, and competitive electricity supplies, noting the evolving challenges governments face globally in meeting these demands.

Recent data from the International Energy Agency (IEA) indicates that the world’s electricity consumption is on track to increase significantly, influenced by the rising needs of data centers and industrial electrification. Forecasts suggest that global power demand from data centers could grow by 50% by 2027 and potentially by 165% by the decade’s end, largely due to advancements in AI and high-density data centers.

Doug Kimmelman, ECP’s Founder and Executive Chairman, added that AI will drive considerable economic and job growth in the United States over the next decade, contingent on the development of sufficient electricity supplies. He expressed pride in partnering with ADQ to fulfill the electricity needs of the expanding AI data center sector, highlighting the necessity for significant, long-term capital investments in new power generation resources.

ADQ manages more than 25 portfolio companies across over 130 countries in essential sectors including energy, agriculture, and healthcare. As of June 30, 2024, the company’s total assets were valued at $225 billion. ECP, established in 2005, is recognized as a prominent investor in energy transition infrastructure, having owned and operated over 83 GW of power generation across major U.S. power markets.