Jan 13 (Reuters) - The Abu Dhabi Investment Authority

(ADIA) is investing $500 million in Alpha Generation, a U.S.

power infrastructure company owned by private equity, the

companies told Reuters on Monday, as the race to invest in power

generation assets intensifies.

Formed a year ago by ArcLight Capital Partners to manage and

operate the buyout firm's power infrastructure investments,

AlphaGen constitutes one of the largest portfolios of

independent power assets in the United States, with more than 11

gigawatts of generation capacity spread across six states.

"This investment, and the partnership between ourselves and

ADIA, will help catalyze both the future growth of, and the

value of, this strategic portfolio of assets," Angelo Acconcia,

partner at ArcLight, told Reuters in an interview.

ADIA's $500 million is for a minority stake in AlphaGen,

according to a joint statement from the parties. Acconcia

declined to comment on the size of the minority stake or the

valuation at which the ADIA investment valued AlphaGen.

The move by the sovereign wealth fund comes amid a frenzy of

deals activity in the U.S. power industry, as the boom in

artificial intelligence and data centers, as well as

electrification efforts in manufacturing and transportation, is

driving power demand to record levels, with further growth

projected through the rest of the decade and beyond.

This is making investments into the U.S. power sector,

whether for generation assets, transmission infrastructure,

energy storage or associated companies, increasingly attractive

both for money managers and existing industry players.

On Friday, in the largest U.S. power acquisition in nearly

two decades, Constellation Energy ( CEG ) agreed a $16.4 billion

deal to purchase Calpine from the investors which owned the

independent power producer.

Unlike utilities, independent producers - such as the plants

operated by AlphaGen - can sell power at market prices, allowing

them to profit more when demand rises.

ArcLight, an energy-focused private equity firm founded in

2001, has owned, controlled, or operated more than 65 gigawatts

of generation assets and 47,000 miles of transmission

infrastructure, according to the statement.

The ADIA investment into AlphaGen is subject to regulatory

approvals and is expected to close in the first half of 2025,

the statement added.