Investment firms KKR and HASI commit further $1 billion to power infrastructure venture

By Isla Binnie

NEW YORK, Dec 15 (Reuters) - KKR KKR.N and investment group HA Sustainable Infrastructure Capital (HASI) HASI.N have added a combined $1 billion to a partnership set up to invest in clean energy assets in the United States and meet voracious demand for power driven by the build-out of data centers for artificial intelligence, the two companies told Reuters on Monday.

WHAT HAVE KKR AND HASI AGREED TO DO?

• The companies are putting $500 million each into a co-investment vehicle called CarbonCount Holdings 1, bringing its total investment capacity to nearly $5 billion, they said.

• Most of the investments made so far have been in large utility-scale solar generation and storage assets, and other technologies including onshore wind, processes to capture methane from biological waste and turn it into electricity or fuel, and electrified transport.

• The investment period has been extended to the end of 2027, or earlier if all the money is spent before then, they added.

WHY DO THEY THINK THIS IS A GOOD INVESTMENT?

• Power needs are rising in the United States, said Cecilio Velasco, who leads energy transition investments in the Americas for KKR. "The biggest bucket" of demand is companies running data centers, including for artificial intelligence development, he said. Other major consumers include industry and electrified transport. "If you look a couple of decades back, power demand in the U.S. was pretty flat, then a couple of years ago, it really started picking up,” Velasco said.

• Many of the large projects where the partnership looks to invest will provide power to big technology companies, said Marc Pangburn, chief revenue and strategy officer at HASI. Large technology companies known as hyperscalers have not been investing in owning power generation capacity themselves, he added. "The business models are very different," Pangburn said.