Abu Dhabi balances AI and net zero with $9.8bn infra spend
3 April 2025
Commentary
Jennifer Aguinaldo
Energy & technology editor
Abu Dhabi National Energy Company (Taqa) and Emirates Water & Electricity Company (Ewec) have officially confirmed the scale of the power generation and grid infrastructure being planned to support the UAE capital’s artificial intelligence (AI) strategy.
The picture emerging from today’s announcement indicates a total investment of AED36bn, or roughly $9.8bn.
This includes the round-the-clock solar photovoltaic plus battery energy storage system project that Ewec and Abu Dhabi Future Energy Company (Masdar) announced in January, and which requires an estimated $6bn.
Today’s announcement said an advanced grid infrastructure project will account for 25% of the total investment, which equates to about $2.45bn. This implies that the build, own and operate contract for the Al-Dhafra open-cycle gas turbine (OCGT), which Taqa will 100% own, will require roughly $1.35bn.
The chosen energy infrastructure combination shows Abu Dhabi’s resolve to address the high energy density of the nascent AI sector and its commitment to achieving net-zero emissions in the long term.
These major investments provide a glimpse into the scale and urgency of Abu Dhabi’s AI ambitions.
In January, for instance, the government said it plans to deploy AED13bn for a three-year digital strategy to make Abu Dhabi the first government globally to fully integrate AI into its digital services by 2027.
The strategy includes achieving 100% adoption of sovereign cloud computing for government operations and digitising and automating 100% of processes to streamline procedures, enhance productivity and improve operational efficiency.
The strategy is projected to contribute AED24bn to Abu Dhabi’s GDP by 2027 while creating more than 5,000 jobs to support Emiratisation efforts.
Abu Dhabi-owned data centre operator Khazna Data Centres is also preparing for a major capacity expansion. Construction is under way for the state’s first 100MW data centre in Ajman.
In addition, UAE AI and technology fund MGX and US-based private equity investor Silver Lake recently acquired a minority stake in Khazna, while Abu Dhabi AI firm G42 remains the company’s majority shareholder.
A March meeting between US President Donald Trump and Abu Dhabi deputy ruler, Sheikh Tahnoon Bin Zayed Al-Nahyan, at the White House also highlighted Abu Dhabi’s unfolding AI pursuit.
The formation of a $25bn joint venture between Abu Dhabi’s ADQ and US-headquartered Energy Capital Partners (ECP) to build data centres in the US preceded that meeting.
However, in the minds of some observers, the real diplomatic objective of the UAE is to gain easier access to US-made graphics processing units (GPUs), which are vital to the successful implementation of its AI strategy.
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