McDermott Will & Schulte, a global law firm

As private credit continues to reshape the energy and infrastructure development finance landscape, McDermott is at the forefront, representing direct lenders, institutional investors, credit platforms, and sponsors accessing non-bank capital. Our team structures bespoke credit solutions for development, construction, acquisitions, and portfolio growth, leveraging our understanding of energy assets, risk allocation, market terms, and intercreditor dynamics.

Key Takeaways from the Power Generation Credit Summit

The following highlights key themes from a recent panel discussion at the Power Generation Credit Summit, hosted by McDermott and Fifth Third Securities. Moderated by McDermott Energy & Project Finance Group Co-Head Chris Gladbach, the panel featured representatives from Fifth Third Securities, Blackstone, EIG Partners, Infranity, Global Infrastructure Partners, and the Office of Energy Dominance Financing, offering diverse perspectives on trends shaping the power and credit markets.

1. Capital is available, but risk discipline remains paramount
   There is no shortage of capital seeking infrastructure opportunities, but investors are deploying it selectively. Participants emphasized that underwriting standards remain rigorous, with significant focus on execution risk, contract quality, permitting, sponsor capability, and supply chain considerations. Delays, procurement challenges, and evolving policy requirements were cited as factors that continue to influence timelines, project economics, and financing decisions. At the same time, some participants noted that market complexity and dislocation can create attractive opportunities for capital providers willing to navigate those risks.
2. Infrastructure continues to stand apart from broader market volatility
   Despite uncertainty surrounding interest rates, tariffs, policy changes, and the broader economy, participants generally expressed confidence in the long-term fundamentals supporting infrastructure investment. The essential nature of energy infrastructure, coupled with long-duration cash flows and growing power demand, continues to attract capital. Several speakers suggested that investors view the sector as relatively resilient compared to many other areas of the market.
3. Data centers and AI are impacting investment decisions across the power sector
   The rapid growth of data center and AI-driven power demand was a recurring theme throughout the discussion. Participants highlighted the resulting need for additional generation capacity and the implications for project development, financing structures, contracting strategies, and technology selection. Several speakers discussed where the market may sit in the current investment cycle and the extent to which projected demand growth will translate into long-term infrastructure investment opportunities. Participants highlighted the implications for project development, financing structures, contracting strategies, and technology selection, while acknowledging that infrastructure constraints may limit how quickly new supply can come online and are increasingly shaping development and financing decisions across the sector.
4. Execution certainty is driving a return to proven technologies
   Several panelists highlighted a renewed focus on technologies with established operating histories and known cost profiles. While innovation remains part of the broader conversation, some participants cautioned that first-of-a-kind technologies continue to face challenges in securing financing due to execution and timing risks. As a result, many investors are prioritizing opportunities where technology risk is already well understood and operational performance can be more reliably underwritten.
5. Gas-fired generation is seeing a shift toward acquisition over new build
   Panelists discussed a growing preference for acquiring existing gas-fired assets, with one participant observing that such assets are often available below replacement cost. Others noted that new-build projects face higher capital costs, turbine shortages, and longer development timelines, making acquisition opportunities comparatively more attractive. Where new construction is pursued, contracted offtake arrangements are increasingly viewed as critical to financing viability, particularly as developers seek to serve growing power demand from data centers and other large-load customers.