Abu Dhabi Sovereign Wealth Funnels Capital into Bitcoin Mining

Posted on 05/10/2023

Marathon Digital Holdings, Inc. (NASDAQ:MARA) and Zero Two (Registered name FS Innovation), an emerging blockchain and digital assets infrastructure development company announced further details regarding the formation of a joint venture (JV) to establish the first large-scale immersion Bitcoin mining operations in the Middle East. Abu Dhabi Developmental Holding Company PJSC (ADQ) owns Zero Two.

The newly formed Abu Dhabi Global Markets JV Entity will initially develop and operate two digital asset mining sites with a combined capacity of 250 megawatts. The larger 200MW site will be located in the sustainability hub of Abu Dhabi, Masdar City, and the 50MW site will be located in the port zone of Mina Zayed. To power the sites, Marathon and Zero Two intend to leverage excess energy in Abu Dhabi, increasing the base load and sustainability of the Abu Dhabi grid. Marathon and Zero Two will offset any non-sustainably produced electricity with clean energy certificates.

The equity ownership in the ADGM Entity will be 80% for Zero Two and 20% for Marathon. During the 2023 development period, capital contributions, in proportion to the equity interest in the ADGM entity, are anticipated to total approximately US$ 406 million in aggregate. These contributions will consist of both cash and in-kind (i.e., equipment, infrastructure, etc.) amounts. The digital assets mined (i.e., bitcoin) by the ADGM Entity will be distributed twice per month and in accordance with the equity ownership between Zero Two and Marathon, respectively.

Previously, Marathon and Zero Two launched a pilot program to test the efficacy of building a large-scale digital asset mining operation in Abu Dhabi

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