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Muscat: Hodler Investments (Hodler), a UAE based investment company, headquartered in the Dubai Silicon Oasis, which includes in its portfolio energy, AI, and digital asset mining startups such as PermianChain, Brox Equity and others, has announced its ongoing plans for a $500 million Digital Energy Infrastructure (DEI) Fund to be established as a closed-ended exempt Fund, subject to compliance and regulatory approvals.
The DEI Fund has already secured soft commitments from lead investors and in-kind contributions in addition to offtake partners seeking energy and connectivity for A.I. and digital asset mining operations.
The DEI Fund will offer professional investors and clients the opportunity to invest in utility-like income generating assets and distributed energy infrastructure for compute applications that adopt innovative methods for carbon capture, storage & utilisation. The DEI Fund’s investment mandate covers the entire digital energy value chain including sectors such as clean energy, power generation (IPPs), data mining (ASICs, GPUs, etc…) for blockchain, Decentralized Physical Infrastructure (DePIN), AI, cloud, and other compute cluster applications with a focus on achieving zero-emissions across the majority of the Fund’s portfolio.
Additionally, the DEI Fund will allocate capital investments towards vertical technology startups operating platforms and software that add value to the Fund’s portfolio. The Fund will seek to acquire early to growth stage modern software technology companies that are active in digital infrastructure and software applications that support the development and growth of financial technology (FinTech), decentralised finance (DeFi), web3, blockchain and artificial intelligence (AI).
Hodler has appointed and engaged Ento Capital Management, a well-established asset manager in DIFC regulated by DFSA with a Sharia-compliant window for ethical investing, to advise on, structure, establish and manage the DEI Fund.
Mohamed El Masri, Managing Director, Hodler Investments said, “The Digital Energy Infrastructure Fund is a testament of our commitment to our mission, centered around the development of critical energy infrastructure for the advancement of the digital economy globally. We are proud to be leading this mission out of the UAE, building on the nation's strategy to develop a digital economy while encompassing sustainability at the core. We are committed to contributing to energy security and reducing energy poverty.”
It is estimated that global spending on construction of new data centres is expected to surpass $49 billion by 2030 (source: MicKinsey & Company). With over $1 trillion funding gap in renewable energy, it is believed to be an opportune time to lay the groundwork to power the advancement of compute infrastructure for a vibrant digital economy.
Ahmed Ebrahim, Managing Director, Hodler Investments, said, “We are confident in our initiative to unlock natural wealth for all stakeholders including communities. The Digital Energy Infrastructure Fund is capitalising on an existing pipeline of deals and projects that have been vetted by our qualified team of professionals backed by almost a decade of industry expertise and long-standing relationships with institutional stakeholders across the Middle East, Asia and North America”.
The DEI Fund aims to utilise technologies such as blockchain, A.I., digital asset mining and other solutions combined with energy resources to strengthen the feasibility for sustainable energy infrastructure to meet the growing compute power demands while contributing to power grid stability for more equitable energy systems globally.
The utilities sector has seen an exponential growth in energy demand from modern compute applications. Data center electricity consumption stood at around 240-340 TWh (source: EIA).
Alaa Al Ali, Founder & Group CEO, Gewan Holding notes, “Our decision to be part of the Digital Energy Infrastructure Fund stems from our belief that the digital economies of the future cannot grow without globally distributed sustainable energy infrastructure. We are confident in our stakeholders and our collective effort to build sovereign digital energy infrastructure. We see the Fund as an effective vehicle to support the UAE’s Digital Economy Strategy.”
Currently the DEI fund is expected to have a size of between $250 million and $500 million, including in-kind commitments with a value not exceeding the total capital commitments.
The Fund’s capital commitments will be focused on providing Limited Partners exposure to, an existing energy envelope with offtake commitments and deal-flow from a portfolio of companies with high growth potential and proven business models.
Hodler has secured over $300 million in exclusive deal-flow across the Middle East, North America, Australia, Asia and Africa.
Amer Al Osh, Chief Development Officer, Gewan Holding added, we are pleased to be working closely with the team at Hodler to establish a compliant structure subject to regulatory approval. Given recent advancements in UAE regulations around digital assets and more specifically the recent landmark steps by the UAE’s financial jurisdictions to enact favorable laws for digital assets and AI sectors, we see improved investor sentiment for this type of asset class.
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