Abu Dhabi's $25bn US deal to explore 24-hour renewable-power for AI

ADQ's partnership with Energy Capital Partners focuses on support for US need to fuel rapid growth of data centres

US President Donald Trump welcomes Sheikh Tahnoon bin Zayed to the White House. Photo: Donald Trump / Truth Social

New details about the massive $25 billion UAE-US partnership reveal plans to provide all-day power for data centres and meet the rapidly growing needs of energy-intensive technology industries, mainly in the US.

Abu Dhabi's sovereign wealth fund ADQ and US private equity firm Energy Capital Partners (ECP) announced the 50-50 partnership on Wednesday, launched with an initial combined contribution of $5 billion. This will go towards creating 25 gigawatts-worth of new-build power generation and energy infrastructure with capital investments of more than $25 billion over the next five years.

"The project will explore the potential of adding 24/7 renewable power to the energy mix in the future," an ADQ representative told The National in a written statement. For now, it will primarily focus on "gas-fired power generation assets that can meet the growing needs of hyperscalers and other energy-intensive industries". This will provide "new power" directly to data centres and other projects, rather than supplying greater power grids, in high-need areas in the US.

Rapid demand

Data centres – used to power advanced AI technology – alone consumed 4.4 per cent of total US electricity in 2023. That figure could reach 12 per cent by 2028, according to a US Department of Energy (DOE) report published last December.

This growth is exemplified by recent major US projects including a $20 billion investment by the Dubai real estate developer Damac Properties in January. The investment will support "massive new data centres" in Texas, Arizona, Oklahoma, Louisiana, Ohio, Illinois, Michigan and Indiana, said Donald Trump, who was the president-elect at the time.

"We are focusing on north-east and south-west demand pockets in the United States and expect to sign the first PPA [power purchase agreement] within the next 12 months," the Abu Dhabi sovereign wealth fund said in a statement. The power projects will provide bespoke energy solutions to customers by working with data centre operators and their tenants alike to identify their needs and build power-generation assets that fulfil their requirements, it added.

ADQ, which focuses on critical infrastructure and supply chains, has a footprint in over 130 countries through the operations of its portfolio companies, including the US, in sectors including health care and agriculture. The wealth fund manages $225 billion in assets as of June last year. Energy and utilities make up 39 per cent of the global investor's portfolio.

US-UAE synergy

The ADQ-ECP deal comes alongside the visit to the US of the UAE's National Security Adviser and Deputy Ruler of Abu Dhabi, Sheikh Tahnoon bin Zayed. Mr Trump said discussions with Sheikh Tahnoon, who chairs ADQ, centred on efforts to strengthen co-operation on the economy and technology.

The two leaders discussed improving ties in sectors such as artificial intelligence and infrastructure, according to the UAE state news agency Wam, on Wednesday. Last week, UAE Minister of Industry and Advanced Technology Dr Sultan Al Jaber said the Emirates views the US as a major business partner in energy and technology, during a keynote address at the annual global energy conference CERAWeek by S&P Global in Houston, Texas.

Dr Al Jaber, who is also Adnoc's managing director and group chief executive, unveiled what he called the world's first renewable and battery storage facility at the opening of Abu Dhabi Sustainability Week in January.

Abu Dhabi clean energy technology Masdar is able to combine 5 gigawatts of solar capacity with 19 gigawatt hours of battery storage to produce one gigawatt of "uninterrupted clean power", he said at the time. The technology can provide this continuous stream of power at scale and around the clock in the UAE capital and transform renewable energy into a reliable baseload energy for the first time, he added.