Muscat: Hodler Investments (Hodler), a company based in the United Arab Emirates with its headquarters in the Dubai Silicon Oasis, is set to announce its continued plans for the establishment of a $500 million Digital Energy Infrastructure (DEI) Fund. This fund, which will operate as a closed-ended exempt Fund, is subject to the necessary compliance and regulatory approvals.
The DEI Fund has already received preliminary commitments from its lead investors and has secured in-kind contributions, in addition to offtake agreements from partners interested in energy and connectivity for their A.I. and digital asset mining operations.
This fund aims to provide professional investors and clients with the opportunity to invest in utility-like income-generating assets and distributed energy infrastructure designed for compute applications that employ innovative methods for carbon capture, storage, and utilization. The investment mandate of the DEI Fund encompasses the entire digital energy value chain, including sectors such as clean energy, power generation (Independent Power Producers or IPPs), data mining (including ASICs, GPUs, etc…), blockchain, decentralized physical infrastructure (DePIN), AI, cloud, and other compute cluster applications, all with a focus on achieving zero-emissions across the majority of the Fund's portfolio.
Furthermore, the DEI Fund will allocate capital towards vertical technology startups that operate platforms and software that enhance the value of the Fund's portfolio. The Fund is in the process of acquiring early to growth stage modern software technology companies active in digital infrastructure and software applications that support the development and growth of financial technology (FinTech), decentralized finance (DeFi), web3, blockchain, and artificial intelligence (AI).
To oversee the establishment and management of the DEI Fund, Hodler has appointed Ento Capital Management, a reputable asset management firm based in the Dubai International Financial Centre (DIFC) regulated by the Dubai Financial Services Authority (DFSA) and with a Sharia-compliant window for ethical investing, to provide advisory services.
Mohamed El Masri, the Managing Director of Hodler Investments, expressed, "The Digital Energy Infrastructure Fund stands as a testament to our unwavering commitment to our mission, which is centered around the development of critical energy infrastructure to facilitate the advancement of the digital economy on a global scale. We take great pride in leading this mission from the United Arab Emirates, building upon the nation's strategy to foster a digital economy that is deeply rooted in sustainability."
Mr. El Masri further stated, "We are dedicated to enhancing energy security and alleviating energy poverty. The projected global expenditure on the construction of new data centers is anticipated to exceed $49 billion by 2030, according to sources at McKinsey & Company. Concurrently, there exists a significant funding gap of over $1 trillion in renewable energy. This presents a unique opportunity to lay the foundation for the advancement of compute infrastructure, thereby powering the growth of a vibrant digital economy."
Ahmed Ebrahim, the Managing Director of Hodler Investments, added, "We are confident in our initiative to harness natural resources for the benefit of all stakeholders, including communities. The Digital Energy Infrastructure Fund is leveraging an existing portfolio of deals and projects that have been rigorously evaluated by our team of qualified professionals. This team is supported by nearly a decade of industry experience and longstanding relationships with institutional stakeholders across the Middle East, Asia, and North America."
The Digital Energy Infrastructure Fund is committed to leveraging technologies such as blockchain, artificial intelligence, digital asset mining, and others, in conjunction with energy resources. This approach aims to strengthen the feasibility of sustainable energy infrastructure to meet the escalating demands of compute power, while also contributing to the stability of the power grid and the development of more equitable energy systems worldwide.
The energy sector has witnessed a significant surge in energy demand driven by modern computing applications. The consumption of electricity by data centers has risen to approximately 240-340 terawatt-hours (TWh), as reported by the EIA.
Alaa Al Ali, the Founder and Group CEO of Gewan Holding, commented, "Our decision to participate in the Digital Energy Infrastructure Fund is rooted in our conviction that the digital economies of the future will not be possible without a globally distributed sustainable energy infrastructure. We are confident in our stakeholders and our collective endeavor to construct sovereign digital energy infrastructure. We view the Fund as an effective mechanism to support the United Arab Emirates' Digital Economy Strategy."
At present, the Digital Energy Infrastructure Fund is projected to have a capital size ranging from $250 million to $500 million, inclusive of in-kind commitments, with a value not exceeding the total capital commitments.
The Fund's investment strategy will concentrate on offering Limited Partners exposure to a well-established energy sector, characterized by offtake commitments and a portfolio of companies boasting high growth potential and robust business models.
Hodler has successfully secured over $300 million in exclusive deal flow across various regions, including the Middle East, North America, Australia, Asia, and Africa.
Amer Al Osh, the Chief Development Officer of Gewan Holding, remarked, "We are delighted to collaborate closely with the Hodler team in establishing a compliant structure, pending regulatory approval. The recent developments in UAE regulations, particularly the significant steps taken by the UAE's financial jurisdictions to introduce favorable legislation for digital assets and the AI sectors, have fostered a more positive investor outlook towards this asset class."
