KKR, ECP Launch $50 Billion Data Center and Power Generation Investment Partnership
Alternative asset and private equity investor KKR and energy transition infrastructure investment firm Energy Capital Partners (ECP) announced today the launch of a new strategic partnership targeting $50 billion of investment aimed at accelerating the deployment of data center and power generation capacity to support the rapid global growth in AI and cloud computing.
According to the firms, the new partnership comes amidst an “urgent need to fund data center, power, and grid infrastructure in the U.S. and globally,” as advancements in AI drive a rapid growth in demand for data centers, while a lack of power to run the facilities holds back deployment.
Over the past few months, several major tech companies, such as Microsoft, Google and Amazon, have also highlighted increased energy needs to meet the AI-driven growth in data centers as a key challenge to their decarbonization goals. According to the International Energy Agency (IEA), data centers consumed 460TWh in 2022, with this figure projected to possibly double by 2026. The companies have been actively signing deals to ramp the deployment of renewable energy to help meet their needs, as well as exploring other clean energy technologies, including nuclear power.
Doug Kimmelman, Founder and Senior Partner, ECP, said:
“In order for the U.S. to maintain its advantage in AI, we will need massive new investments in power infrastructure on an accelerated basis that are capable of addressing concerns related to electricity prices and carbon emissions. We are committed to delivering solutions for our strategic partners and our investors through ECP’s strong utility relationships and expertise investing across a wide variety of power generation, renewable, and battery storage assets.”
The firms said that the new partnership KKR’s “deep expertise in digital infrastructure, power, and the energy value chain” and ECP’s “premier energy transition platform in electrification and power and renewable generation.”
Under the new partnership, KKR and ECP said that they plan to deliver scaled data center and power solutions for hyperscalers and other market participants to support infrastructure needs across geographies, and to engage with utilities, power and data center developers, and independent power producers to accelerate the delivery of data center campuses required by hyperscalers.
Joe Bae, Co-Chief Executive Officer at KKR, said:
“Data center power demand is expected to grow by 160% by 2030, a demand that will go unmet without the right infrastructure in place, which is critical to boosting productivity, supporting electrification and helping countries create a competitive edge in AI. At the same time, the scaling of this mission-critical infrastructure must be done affordably, reliably, and sustainably, while addressing the needs of all stakeholders – from technology companies to end consumers.”
KKR said that it will fund the new partnership from existing infrastructure and real estate strategies and insurance accounts, while ECP is funding will come from existing and future infrastructure capital pools.