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Blackstone, advised by Kirkland & Ellis LLP, has agreed to purchase a natural gas power plant in Loudoun County, Virginia, for $1 billion, according to a source familiar with the transaction. The acquisition, announced Friday, includes Potomac Energy Center, a 774-megawatt facility strategically located in one of the world's largest data center markets.

Strategic Acquisition Bolsters Blackstone's Energy Portfolio

The investment will be managed through Blackstone Energy Transition Partners, the firm's energy-focused private equity business. While financial terms were not disclosed in the announcement, a source confirmed the $1 billion valuation, with Ares Management serving as the seller.

Mark Zhu, managing director at Blackstone Energy Transition Partners, praised the plant’s forward-looking capabilities.

“Potomac is one of the most efficient gas power plants in the region and has the potential to integrate a hydrogen fuel blend in the future, which could provide future environmental benefits,” Zhu said in a statement.

Situated near over 130 data centers, the facility’s proximity to critical digital infrastructure underscores its strategic importance for Blackstone.

Blackstone's Continued Investment in Digital Infrastructure

The deal, first reported by Reuters, is part of Blackstone's broader strategy to support data center and energy infrastructure investments, particularly those aligned with artificial intelligence technologies. Last November, Blackstone acquired a $1 billion portfolio of loans financing digital infrastructure, renewable energy, energy efficiency, and transportation assets across the U.S. and Western Europe.

In May, the firm committed $7.5 billion in debt financing to CoreWeave, a prominent AI infrastructure provider.

Addressing Power Challenges in Loudoun County

As demand for data centers surges, areas like northern Virginia, home to Loudoun County, face power constraints that challenge expansion. This acquisition positions Blackstone to address these limitations while leveraging the region’s growing need for sustainable energy solutions.

Both Blackstone and Ares declined to comment further on the transaction.