DATA CENTER: AVAIO Digital Partners plans to raise USD 10bn to fully scale maturing data center pipeline

AVAIO Digital Partners (ADP) plans to raise approximately USD 10bn in the coming years to scale its maturing pipeline of data center projects in the U.S.

The capital effort is aimed at fully building out a portfolio capable of supporting 1.2 GW of utility power by 2030, and the company expects to raise some USD 3bn in capital for initial construction at select sites starting in 2025, co-founder and CEO Mark McComiskey said in an interview with NPM.

The Stamford, Connecticut-based company’s approach focuses on developing integrated campuses where data centers are strategically located alongside renewable energy solutions and, where necessary, gas-fired power plants to meet immediate energy demands.

The financing needs of ADP and the wider data center market represent a new paradigm for capital intensity in global markets, McComiskey said.

“We have rapidly gone from the oil and gas industry being the most capital-intensive industry in the world to data centers being the most capital-intensive industry in the world,” he said. As part of this, utilities are increasingly requiring data center developers to pay for substations, line upgrades, and a pro-rata share of new power plants in return for large power allocations.

“The data center side of it is super capital intensive by itself,” he added, “but every time you plop down a 100MW data center, something is happening on the grid, right?”

ADP, whose principals have many years of energy project development experience, serves as AVAIO Capital’s dedicated vehicle for digital infrastructure, which includes data centers, fiber networks, and satellite projects. The platform was established with an initial USD 375m equity commitment in 2021 from an undisclosed institutional investor managing over USD 20bn in assets.

ADP is gearing up now for customer conversations to bring in data center offtakers starting in early 2025. Once agreements are signed, it will use its own equity capital to invest in projects to launch horizontal construction on its pipeline. And it plans to tap the market for construction capital – either in the form of project finance or private credit – after 1Q25, McComiskey said.

The company’s four most advanced projects in the U.S. – including a USD 3bn undertaking in Appomattox County, Virginia – are fully entitled, permitted, and have confirmed interconnect agreements for power so far totaling over 400MW that can be delivered in the next 2.5 years.

The executive noted that the ultimate price tag for construction will depend on customer specifications, but that the mid-case estimate for the 1.2GW of power commitments and 800 – 900MW of critical IT – a build-to-suit arrangement – would amount to USD 10bn at today’s construction prices.

ADP is also developing sites in Ireland and Spain, according to a map on its website.

“What we wanted to do is get a basket of sites that were fully permitted, that had the power with the interconnect agreements signed, and get the long lead-time equipment ordered, so we could go out to the big customers in the world and say, ‘We’ve got a bunch of sites we can talk to you about. We have a defined date that we can deliver power on, and we can start shovels in the ground the moment you sign,’” he said.

McComiskey said ADP has not yet hired a debt advisor for the construction financing, stating that it would depend on the type of financing they pursue: If traditional bank debt, they are unlikely to use an advisor because they have substantial experience raising project finance capital themselves.

However, if the financing involves something “more unique and structured,” he said, they might consider bringing in an advisor.

Longer-term financing plans include transitioning revenue-generating projects into securitization models to access lower-cost capital through asset-backed lending.

“By the time we have one building up and running and generating revenue, they will be by definition commercially established, fully powered, and have very low-cost expansion capabilities on each of them,” he said.

In addition to its core digital infrastructure, ADP emphasizes energy solutions, particularly clean and renewable power. For select sites, the company plans to develop on-site solar capacity—for instance, up to 100MW—directly connected to data centers in order to bypass grid delays.

ADP has also chosen sites, like one south of Little Rock, Arkansas, that are near gas pipelines with available capacity, allowing them to stand up gas-fired power plants to supply hundreds of megawatts of power within a short timeframe. At the Little Rock site, for example, the developer can offer 800MW of power by the end of 2027, something McComiskey described as “functionally impossible” to achieve through standard grid applications due to long interconnection timelines.

“The energy transition side of our business is pretty implicated in terms of what we’re doing on the digital side of our business,” he said. “Because in a lot of the places that we’re looking to build data centers, we’re also looking to build behind-the-meter, data-center-adjacent renewables or gas,” he continued, noting that the data center and renewables would come from different pools of capital.

*This story was originally published exclusively for NPM subscribers.

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