The data centre industry has grown amid increased digitalisation. AFP
The data centre industry has grown amid increased digitalisation. AFP
The data centre industry has grown amid increased digitalisation. AFP
The data centre industry has grown amid increased digitalisation. AFP

ADQ’s $25bn US energy deal underlines importance of investing in future


Alvin R Cabral
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Abu Dhabi's ADQ joining with US private equity firm Energy Capital Partners for a $25 billion energy and data centres mega strategy is the latest big-ticket investment from the UAE.

Abu Dhabi's sovereign wealth fund announced on Wednesday that it has partnered with Energy Capital Partners to invest in energy projects and power data centres, mostly in the US.

The move puts the spotlight on the Emirates' efforts to tap into high-potential sectors and is also in line with plans to position itself for a future economy fuelled by technology.

Why is ADQ doing this deal?

ADQ's investment is in line with trends in the technology sector, in particular, data centres, which have emerged as an important component as the consumption of data has exploded. Remote working trends, largely established in response to the Covid-19 pandemic, have led to increased data consumption, fuelling the adoption of cloud services and the data centres that house them.

That has given incentive for companies and investors to pour money into the segment, betting on an industry expected to grow further.

"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," Mohamed Alsuwaidi, managing director and group chief executive of ADQ, said in a statement.

The global data centre market is projected to hit nearly $585 billion by 2032, from an estimated $242.72 billion in 2024, growing at a compound annual rate of almost 12 per cent, data from Fortune Business Insights shows.

The ADQ-Energy Capital Partners deal will involve an initial $5 billion being poured into the projects, mostly in the US. The full $25 billion will be used within the next five years, with the potential to be increased if there are other opportunities, Bloomberg reported, quoting ADQ deputy group chief executive Hamad Al Hammadi.

How crucial is energy for data centres?

Data centres consume a considerable amount of energy and this will only grow further as the adoption of digitalisation and artificial intelligence increases.

In the US, where ADQ's data centre investment will be concentrated, the power needs of data centres are projected to grow to about three times higher than the current capacity by the end of the decade, just to keep pace with adoption, consultancy McKinsey said.

That means that, from the present 3 per cent to 4 per cent of total US power demand, those needs will soar to between 11 per cent and 12 per cent by 2030, it said.

The US Department of Energy, meanwhile, previously said that data centre load growth had tripled in the past decade and was projected to double or triple by 2028. US electricity demand is seen to account for data centre expansion and the rise of AI applications, it added.

What deal says about UAE-US relations

Energy is one of ADQ's key portfolios. With the energy mix expected to shift considerably, "this is influencing an increasing focus on large-scale investments in renewable energy, resulting in enhanced energy efficiency", it said.

ADQ's strategy also mirrors the broader strategy of the UAE to become a major player in technology and energy globally, and the ADQ-Energy Capital Partners deal highlights how relations between the UAE and US continue to grow.

The Emirates views the US as a major business partner in energy and technology, and investing in the world's largest economy is an “absolute imperative”, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, said this month in a conference in Houston, Texas.

On Tuesday, Mr Trump also highlighted UAE-US efforts to strengthen co-operation on the economy and technology during a meeting with Sheikh Tahnoon bin Zayed, Deputy Ruler of Abu Dhabi and National Security Adviser.

In February, Adnoc, the Abu Dhabi-based UAE energy bellwether, moved its US investments to XRG, the $80 billion international lower-carbon energy and chemicals investment company launched by Adnoc last November.

Among those investments is a 35 per cent stake in an ExxonMobil hydrogen plant in Texas, as well as an 11.7 per cent equity stake in the NextDecade Rio Grande LNG export facility. After Mr Trump's election victory, Dubai-based Damac announced a $20 billion investment in American data centres. Meanwhile, UAE-based technology fund MGX joined Big Tech companies in the recent Stargate AI project in Texas.

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Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Dir: John Lucas and Scott Moore
Starring: Mila Kunis, Kathryn Hahn, Kristen Bell, Susan Sarandon, Christine Baranski, Cheryl Hines
Two stars

Schedule
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UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
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What is Reform?

Reform is a right-wing, populist party led by Nigel Farage, a former MEP who won a seat in the House of Commons last year at his eighth attempt and a prominent figure in the campaign for the UK to leave the European Union.

It was founded in 2018 and originally called the Brexit Party.

Many of its members previously belonged to UKIP or the mainstream Conservatives.

After Brexit took place, the party focused on the reformation of British democracy.

Former Tory deputy chairman Lee Anderson became its first MP after defecting in March 2024.

The party gained support from Elon Musk, and had hoped the tech billionaire would make a £100m donation. However, Mr Musk changed his mind and called for Mr Farage to step down as leader in a row involving the US tycoon's support for far-right figurehead Tommy Robinson who is in prison for contempt of court.

Dubai World Cup nominations

UAE: Thunder Snow/Saeed bin Suroor (trainer), North America/Satish Seemar, Drafted/Doug Watson, New Trails/Ahmad bin Harmash, Capezzano, Gronkowski, Axelrod, all trained by Salem bin Ghadayer

USA: Seeking The Soul/Dallas Stewart, Imperial Hunt/Luis Carvajal Jr, Audible/Todd Pletcher, Roy H/Peter Miller, Yoshida/William Mott, Promises Fulfilled/Dale Romans, Gunnevera/Antonio Sano, XY Jet/Jorge Navarro, Pavel/Doug O’Neill, Switzerland/Steve Asmussen.

Japan: Matera Sky/Hideyuki Mori, KT Brace/Haruki Sugiyama. Bahrain: Nine Below Zero/Fawzi Nass. Ireland: Tato Key/David Marnane. Hong Kong: Fight Hero/Me Tsui. South Korea: Dolkong/Simon Foster.

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Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

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SM Town Live is on Friday, April 6 at Autism Rocks Arena, Dubai. Tickets are Dh375 at www.platinumlist.net

Updated: March 20, 2025, 10:58 AM