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I Squared Capital has signed an agreement to invest up to USD 2 billion in digital infrastructure and district cooling assets owned by Saudi Arabia’s Public Investment Fund (PIF). The investment will be split equally between the two sectors, with scope for further expansion into related infrastructure businesses. The move builds on an investment partnership announced last year and supports Saudi Arabia’s efforts to diversify its economy beyond oil. It also follows reports that PIF was exploring the sale of its district cooling assets as part of its broader capital recycling strategy.
I Squared Capital will invest up to USD 2 billion in real estate-linked infrastructure assets owned by Saudi Arabia’s Public Investment Fund (PIF), according to a joint statement released recently. The investment will be directed towards strengthening the Kingdom’s digital infrastructure and district cooling sectors, reinforcing the long-term partnership between the global infrastructure investment manager and the sovereign wealth fund.
Under the agreement, I Squared Capital will invest up to USD 1 billion each in PIF’s digital infrastructure assets and district cooling business. The partners have also kept the option open to expand the collaboration into other infrastructure-related sectors in the future as new opportunities emerge.
District cooling systems supply chilled water through insulated underground pipelines to provide cooling for commercial buildings, industrial facilities and residential developments. The technology is increasingly being adopted across the Middle East as it offers greater energy efficiency and supports sustainable urban development, particularly in large mixed-use projects and financial districts.
The latest investment follows the understanding reached by I Squared Capital and PIF more than a year ago to establish a dedicated infrastructure investment strategy focused on the Middle East. The new commitment marks the next phase of that partnership by bringing capital into strategic infrastructure assets within Saudi Arabia.
The development also comes after Reuters reported in March, citing sources, that King Abdullah Financial District (KAFD), a PIF-owned entity, had been exploring the sale of its district cooling assets for more than USD 500 million. The current investment aligns with PIF’s broader strategy of attracting private capital into mature infrastructure assets while recycling funds into new strategic investments.
Saudi Arabia has been actively drawing domestic and international investments to support its long-term economic diversification programme under Vision 2030. Through PIF, the Kingdom has expanded investments across multiple sectors, including real estate, infrastructure, technology, renewable energy, sports, gaming and aerospace, with the objective of reducing its dependence on oil revenues and creating new sources of economic growth.
For I Squared Capital, the agreement further strengthens its global infrastructure portfolio and expands its presence in the Middle East. The investment manager has been actively increasing its exposure to digital infrastructure and recently acquired 10 data centre facilities in the United States from Cogent Fiber, further highlighting its focus on the growing demand for digital connectivity and data infrastructure.
Source: Reuters
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