Capital Power Corporation announced a significant expansion of its growth strategy during its 2025 Investor Day event in Toronto, outlining ambitious 2030 targets while securing two strategic agreements that reinforce its position as a leading North American natural gas power producer.
The company announced a memorandum of understanding with funds managed by affiliates of Apollo Global Management to establish a $3 billion investment partnership to acquire merchant natural gas generation assets across the United States. Capital Power also entered into a binding memorandum of understanding with an investment-grade data centre developer in Alberta to negotiate a long-term Electricity Supply Agreement to support the province’s growing demand for AI and digital infrastructure.
The announcements come amid rising electricity needs driven by AI-related load growth and a renewed emphasis on reliable natural gas capacity across North America. Capital Power emphasized its long-standing ability to deliver competitive returns while expanding its operational footprint and enhancing access to capital.
The company reaffirmed its 2030 outlook, including a planned 50 percent increase in U.S. capacity, double-digit annual Total Shareholder Return, and sustained annual AFFO per share growth. It also reiterated its commitment to maintaining dividend growth of 2 to 4 percent annually. Capital Power stated that the new partnership structure with Apollo would accelerate these objectives by enabling larger-scale acquisitions and creating new fee-based revenue streams tied to asset management and performance.
Under the proposed partnership terms, Apollo Funds would contribute up to US$2.25 billion in equity, and Capital Power would contribute up to US$750 million. Capital Power would operate all acquired assets and would elect a working interest of 25% to 50% for each transaction. The arrangement is designed to unlock additional earnings growth by allowing the company to leverage its operating platform, commercial expertise, and optimization capabilities.
In parallel, the binding MOU with the Alberta-based data centre developer contemplates a 250 MW electricity supply agreement beginning in 2028 with a term exceeding ten years. The ESA would be supported by Capital Power’s existing regional generation fleet. A termination fee would be payable to Capital Power if the parties do not finalize a definitive agreement.
The company also released its 2026 financial guidance, projecting Adjusted EBITDA of $1.565 to $1.765 billion, AFFO of $890 million to $1.010 billion, and sustaining capital expenditures of $290 to $330 million. It reiterated its dividend growth target of 2 percent. These projections incorporate contributions from recently acquired PJM assets and reflect continued investment to extend asset life and position the fleet for long-term commercial opportunities.
Capital Power noted that the guidance is based on commodity price assumptions and excludes the effects of future acquisitions, sell-downs, development activities, or unforeseen operational events. The company emphasized its disciplined approach to capital allocation and confidence in its ability to deliver strong returns over the long term.
KEY QUOTES
“We have a long-standing track-record of delivering industry leading returns from natural gas fueled power generation assets, and an ability to acquire and optimize assets better than any other North American independent power producer.”
“Now more than ever, we see an opportunity to grow our business as a result of structural growth in power demand driven by the AI infrastructure boom and the growing need for reliable and affordable energy.”
“Our planned investment partnership with Apollo Funds would accelerate our efforts to deliver long-term reliable growth to our shareholders by augmenting our industry leading growth platform and enhancing our access to capital.”
Avik Dey, President and Chief Executive Officer, Capital Power
