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In this week’s issue:

First, two questions I now use for reading any long-dated AI contract. Bitdeer signed a 16-year lease worth ~$4.7 billion to Volta, a company that emerged from stealth the same day. The two questions that decide what you recover are the next thing you read.

Then, permission replaced power as the constraint. Texas paused new grid connections pending an audit of about 474GW of interconnection requests. NRG announced terms for a 1.2GW Texas plant in the same week, reportedly ~$3.2 billion.

Finally, governments set the fuel. Australia confirmed proposed standards barring gas-only data centres, and Firmus closed $2 billion at a post-money above $10.5 billion.

Let us get into it.

Why the Letter of Credit Is Now the Asset

The bank is now the counterparty on the trade you thought you were doing with the tenant. Bitdeer proved it this week. It executed a 16-year colocation lease at Tydal, Norway worth approximately $4.7 billion across 121 IT MW.

The tenant, Volta, emerged from stealth on the same day the lease was announced. Its obligations are anticipated to be backed by approximately $1.3 billion of letters of credit arranged by affiliates of J.P. Morgan and one other global financial institution.

So look at what is actually behind the $4.7 billion. The GPUs are not the asset. The tenant is not the asset. The credit standing behind the tenant is the asset, and it is not in place yet.

So here is the discipline. When you see a long-dated AI infrastructure contract, ask two questions about it. How did lenders get comfortable with the tenant’s credit? How long does the tenant need to keep lenders comfortable for?

The credit behind the $4.7 billion, and the two other deals that ran the same architecture this week, are below.

THIS WEEK BY REGION

The week’s biggest moves — what happened and what it signals.

Europe

European capacity is being financed on someone else’s balance sheet. Bitdeer signed a 16-year Tydal, Norway lease worth ~$4.7 billion to Volta, which left stealth that same day. Roughly $1.3 billion of anticipated J.P. Morgan letters of credit stand behind the tenant.

Partners Group took majority control of AVK with over $1 billion, and Tritax Big Box raised £350 million for London grid capacity.

If you hold real estate, a listed landlord now accepts dilution below net asset value to hold a grid connection.

North America

The US constraint shifted from power to permission. Texas paused new grid connections amid an ERCOT audit of ~474GW in requests over 5× peak demand. NRG announced a 1.2GW, ~$3.2B Texas plant, with capacity payments covering ~95% of free cash flow.

Banks led by Morgan Stanley are reportedly moving ~$15 billion of Google-backed Nexus Data Centers debt into bonds, and KKR closed a new $19.2 billion infrastructure fund.

You are watching capital arrive faster than permission. If you run an infrastructure fund, the projects that clear this audit will command the premium.

Asia-Pacific

Governments are writing the entry rules across the region. Australia confirmed proposed standards barring new gas-only data centres, with six of eight states and territories backing the framework.

Firmus closed a fully subscribed $2B round with major investors, valuing it above $10.5B post-money. Microsoft launched its largest India region in Hyderabad as part of a ~$20.5B commitment.

For venture investors, the question is which fuel your operators are built on, because the ones regulators prefer are the ones still building in 2028.

Middle East and Africa

Capital here arrives as structure before offtake. DataVolt expects to break ground within months on the 1.5GW Oxagon campus in Neom, funded by an initial $5 billion, with no customer disclosed.

Qatar’s Meeza secured a QAR 1.6 billion (~$439 million) Murabaha facility from Dukhan Bank, adding about 44MW. Both raised the money before naming the buyer.

If you lend from a project finance perspective, here is the question I would ask: what does the debt recover when the offtake never arrives?

South America

Chile’s pipeline is emerging through the interconnection queue. Data Center SC2, a 500MW Tiltil project, seeks connection to the 500kV Polpaico substation by September 2030, but names no offtaker or capital commitment.

If you operate data centers, your scarce asset is the queue slot, because a Santiago campus that waits for a customer will find it gone.

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The Credit Behind the $4.7 Billion

Volta launched at a reported $2.4 billion valuation, having reportedly raised around $300 million across a seed and Series A. The lease obligation is more than fifteen times the equity raised. No company carries that on its own paper.

So the credit is imported. Bitdeer retains the right to terminate if Volta misses the milestones tied to the backstop, and the lease runs to $8.0 billion with a one-time eight-year extension.

The same architecture appeared twice more this week. Banks led by Morgan Stanley are reportedly preparing to move roughly $15 billion of Hubbard, Texas debt into the bond market, backstopped by Google for a campus leased to Anthropic. Those bonds are expected to price speculative-grade. Google’s support only becomes effective once the facility is complete, so the bondholder carries the construction period alone.

NRG built the same idea on the power side. Its 1.2GW Texas project pays about 95% of projected free cash flow through a capacity payment that does not depend on the customer drawing a single megawatt-hour.

Three deals, one pattern. In each case, a party with a real balance sheet stepped between an operator and a counterparty that could not carry the obligation, and the market treated the resulting cash flow as investment grade.

When I ran my two earlier questions above across the three deals, the differences showed up fast.

Volta’s comfort is imported. Roughly $1.3 billion of letters of credit, not in place yet, and it has to hold for sixteen years. Nexus imports it too, from Google, but only from completion onward. The lease term behind those bonds has not been disclosed, so I do not have answer to my second question yet.

NRG might be the exception. The company’s own investment-grade balance sheet can provide lenders with comfort during a 15-year minimum term. Nobody had to manufacture it.

So the marker I am watching is Bitdeer’s next filing. The letters of credit are anticipated and subject to customary conditions. Until a filing confirms they are in place, the $4.7 billion rests on a company that was in stealth last week.

NOTABLE TRANSACTIONS

Key structures and capital moves from this week’s deal tape.

Nexus Data Centers: ~$15 billion of Google-backed construction debt moving to the bond market

Morgan Stanley is reportedly arranging ~$15 billion against the Hubbard, Texas campus leased to Anthropic, with Google taking about 20% of the equity. The bonds should price speculative-grade because Google's support activates only at completion, which leaves the buyer holding construction risk.

If you buy this paper, the mechanism is the timing of the backstop, and that gap is now your whole underwriting question.

NRG: ~$3.2 billion, 1.2GW Texas plant on a 15-year hyperscaler contract

NRG aligned on terms with an unnamed investment-grade hyperscaler for a 1.2GW Texas plant, expandable to 2.4GW, on a 15-year minimum term. A capacity payment covers the capital and delivers about 95% of free cash flow regardless of how much power the customer draws.

For operators, the mechanism is customer-funded generation, and it clears a permitting audit because your load arrives with its own supply.

AVK: over $1 billion from Partners Group for majority control

Partners Group is investing over $1 billion of equity plus debt for majority control, with AVK management retaining a minority stake. The plan converts a supplier of backup generators into a platform that owns and operates behind-the-meter microgrids on long-term contracts.

If you run an infrastructure fund, the mechanism is speed-to-power sold as recurring revenue, priced against European connection queues that keep lengthening.

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Have a great week.

— Obinna

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