The Abu Dhabi Developmental Holding Company (ADQ) and Energy Capital Partners, a leading private equity firm in the energy generation and renewable sector in the United States, have announced a joint venture.

The partnership will focus on creating and developing energy generation projects aimed at enhancing infrastructure within the sector.

This collaboration leverages ADQ's extensive expertise in infrastructure investment combined with Energy Capital Partners' leadership in the energy investment landscape.

The initiative is intended to meet the growing energy demands of data centers, cloud computing companies, and other energy-intensive sectors.

The increasing significance of providing a reliable and high-quality power supply to rapidly expanding sectors has underscored the need for new power generation facilities located nearer to these data-intensive industries.

The partnership aims to address these long-term needs through the development of new energy projects and the expansion of existing ones, positioning itself as a leading energy provider for the ever-growing U.S. economy.

Focusing primarily on the U.S. market, the parties also plan to evaluate opportunities for investment in select international markets.

Together, they intend to invest over $25 billion in projects capable of generating 25 gigawatts of energy, with initial capital contributions from both parties expected to reach $5 billion.

The joint venture is set to commence operations immediately, managed by a team with extensive experience in energy, infrastructure development, and operations.

Specialized development and operations teams will ensure the rapid construction and efficient operation of the projects.

According to a recent report from the International Energy Agency (IEA), global electricity consumption is forecasted to rise at its fastest pace in recent years, largely driven by increasing demands from data centers and industry.

The demand for energy in the United States is expected to grow over the next three years at a rate equivalent to California's annual consumption.

Research forecasts indicate that global energy demand from data centers is set to increase by 50% by 2027 and up to 165% by the end of the decade, fueled by the expansion of artificial intelligence technologies and energy-intensive data centers.

The U.S. Department of Energy estimates that the strain on data centers has tripled over the past decade and is anticipated to double or triple again by 2028.

Mohammed Hassan Al Suwaidi, the Minister of Investment and CEO of ADQ, stated that the rapid expansion of artificial intelligence technology creates promising opportunities to satisfy the advanced energy and infrastructure needs of data centers.

However, it poses increasing challenges for governments worldwide to secure stable, safe, and cost-competitive energy supplies.

He emphasized ADQ's proactive role as a major infrastructure investor, leveraging its extensive experience in building long-term partnerships to contribute to addressing major shifts in the sector.

Al Suwaidi noted that the partnership with Energy Capital Partners would allow for investments in energy generation projects and related infrastructure to meet surging energy demands, contributing to the development of these sectors and bolstering economies in adapting to future changes.

Doug Kimmelman, founder and CEO of Energy Capital Partners, stated that artificial intelligence plays a crucial role in driving the U.S. economy and creating jobs over the next decade, contingent upon the development of sufficient new energy sources.

He expressed pride in partnering with ADQ, which represents a significant investment opportunity in securing essential electricity supplies for data center demands, noting that developing new energy sources or augmenting existing ones in the U.S. will require substantial long-term investments.

He further commented on the current supply and demand dynamics in the U.S. energy market, indicating a need for new energy generating capacities.

Thus, the partnership will primarily focus on constructing new natural gas projects capable of expanding to meet the needs of advanced data centers.

ADQ manages more than 25 subsidiaries across over 130 countries, operating in key sectors within the growing Abu Dhabi economy, including energy and utilities, food and agriculture, healthcare and life sciences, transportation, and logistics.

ADQ has prioritized infrastructure investment since the Abu Dhabi government transferred asset ownership to it, including prominent energy and water companies.

Meanwhile, since its establishment in 2005, Energy Capital Partners has solidified its reputation as a leader in energy transition infrastructure investment, with a portfolio that includes investments in energy infrastructure, renewable energy, storage technologies, sustainability, and decarbonization.

The firm owns and operates energy projects that generate over 83 gigawatts across major U.S. energy markets, utilizing a diverse range of technologies, including natural gas, geothermal, hydro, solar, wind, battery storage, and waste-to-energy processes, over the past two decades.