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Announces MOU with Apollo-managed funds for US$3 billion investment partnership to pursue merchant U.S. natural gas generation acquisitions
Enters into a binding MOU with investment-grade data centre developer in Alberta
Capital Power Corporation ("Capital Power" or the "Company") (TSX: CPX) is hosting its 2025 Investor Day today in Toronto. The event will highlight the Company's strategic priorities, 2030 growth targets, and 2026 guidance, underscoring Capital Power's position as a top-tier North American power producer serving the continent's growing electricity demand with reliable, efficient natural gas generation.
2025 Investor Day Highlights
2030 Targets:
- 50% cumulative increase in U.S. capacity (or ~3.5 GW)
- 13-15% annual Total Shareholder Return (TSR)
- 8-10% annual AFFO per-share growth
- Maintain 2-4% annual dividend growth target
Strategic Agreements:
- A memorandum of understanding ("MOU") with funds managed by affiliates of Apollo Global Management (NYSE: APO) ("Apollo Funds") to form a US$3 billion partnership to pursue the acquisition of merchant natural gas assets across the U.S.
- A binding MOU to negotiate an Electricity Supply Agreement (ESA) in Alberta with an investment-grade data centre developer, strengthening Capital Power's role in powering the province's growing AI infrastructure.
"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," said Avik Dey, President and Chief Executive Officer of Capital Power. "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," Mr. Dey added.
Strategic Partnership Accelerating Growth
Capital Power has entered into an MOU with Apollo Funds to form an investment partnership to pursue the acquisition of merchant U.S. natural gas generation assets, with total potential committed equity of up to US$3 billion. The partnership combines Apollo Funds' capital strength with Capital Power's operating and commercial expertise to accelerate Capital Power's U.S. natural gas growth strategy and expand earnings.
- The MOU contemplates an equity commitment of up to U.S.$2.25 billion from Apollo Funds and U.S.$750 million from Capital Power, with Capital Power electing a 25% to 50% working interest in each acquisition.
- The MOU contemplates a partnership with Capital Power operating acquired assets and receiving management and performance fees.
- Capital Power will create additional value by leveraging its operating platform to enhance asset performance and improve returns.
Powering AI in Alberta
Additionally, the Company entered into a binding MOU with an investment grade data centre developer for a 250 MW ESA. The long-term ESA (10+ years) has an anticipated start date in 2028 and would be backed by Capital Power's Alberta-based power generation portfolio. If a final agreement between the parties cannot be reached, a termination fee will be paid to Capital Power.
2026 Financial Guidance
Capital Power's 2026 financial guidance – ranging across Adjusted EBITDA, AFFO and Sustaining Capital – underscores our commitment to disciplined execution, capital allocation, and reliable long-term growth. 2026 guidance reflects full-year contribution from the recently acquired assets in PJM and reinforces our dedication to investing in our assets as they progress through their life cycle. The enhanced sustaining capital investment is a critical step in extending asset life and positioning the portfolio for commercial maximization opportunities. These guidance ranges reflect continued confidence in our business strategy and our ability to generate outsized returns.
- Adjusted EBITDA: $1,565 – $1,765 million
- AFFO: $890 – $1,010 million
- Sustaining Capital: $290 – $330 million
- Dividend Growth target: 2%
The 2026 targets and forecasts are based on numerous assumptions, including power and natural gas price forecasts. They do not include the effects of asset sell-downs, potential future acquisitions or development activities, or potential market and operational impacts relating to unplanned facility outages, including outages at facilities of other market participants, and the related impacts on market power prices.
2025 Investor Day Webcast
Today's event starts at 9:00 AM ET. The webcast can be accessed at: https://edge.media-server.com/mmc/p/i5itpzzf/
An archive of the webcast will be available on the Company's website following the conclusion of the event.
Non-GAAP Financial Measures and Ratios
Capital Power uses (i) earnings before income tax expense, depreciation and amortization, net finance expense, foreign exchange gains or losses, gains or losses on disposals and other transactions, unrealized changes in fair value of commodity derivatives and emission credits, other expenses from the Company's joint venture interests, acquisition and integration costs, and other items that are not reflective of the Company's facility operating performance (adjusted EBITDA), and (ii) AFFO as specified financial measures. Adjusted EBITDA and AFFO are both non-GAAP financial measures.
Capital Power also uses AFFO per share as a specified performance measure. This measure is a non-GAAP ratio determined by applying AFFO to the weighted average number of common shares used in the calculation of basic and diluted earnings per share.
These terms are not defined financial measures according to GAAP and do not have standardized meanings prescribed by GAAP and, therefore, are unlikely to be comparable to similar measures used by other enterprises. These measures should not be considered alternatives to net income, net income attributable to shareholders of Capital Power, net cash flows from operating activities or other measures of financial performance calculated in accordance with GAAP. Rather, these measures are provided to complement GAAP measures in the analysis of the Company's results of operations from management's perspective.
Forward-looking Information
This press release contains forward-looking information or statements (collectively, forward-looking information) to inform the Company's shareholders and potential investors about management's assessment of Capital Power's future plans and operations. This information may not be appropriate for other purposes. The forward-looking information in this press release is generally identified by words such as will, anticipate, target, and expect or similar words that suggest future outcomes or statements regarding an outlook.
Material forward-looking information in this press release includes, but is not limited to, expectations regarding: (i) the outcomes resulting from the MOU with Apollo Funds, (ii) the outcome resulting from the MOU with the data centre developer, (iii) the Company's priorities and future growth strategies, (iv) the Company's 2030 targets, including U.S. capacity, total shareholder return, AFFO per-share growth, and dividend growth, (v) the anticipated benefits, outcomes, projected timing, and terms of strategic agreements, (vi) power requirements and demand, future growth, and emerging opportunities in the Company's target markets, (vii) various aspects of commercial and partnership arrangements, and (viii) the Company's 2026 financial guidance, including expected Adjusted EBITDA, AFFO, sustaining capital expenditures, and annual dividend growth.
These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate. The material factors and assumptions used to develop the forward-looking information relate to: (i) assumptions contained in this press release relating to the basis of such forward-looking information, (ii) electricity, other energy and carbon prices, (iii) the Company's performance, (iv) the Company's business prospects and opportunities, including expected growth and capital projects, (v) the status and impact of policy, legislation and regulations, (vi) effective tax rates, (vii) the development and performance of technology, and (viii) foreign exchange rates.
Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company's expectations. Such material risks and uncertainties are: (i) identifying and completing acquisitions contemplated by the MOU with Apollo Funds and the timing thereof, and completing documentation with Apollo Funds in respect of the contemplated investment partnership, (ii) completing documentation with the data centre developer in respect of the ESA, and the data centre developer's development and completion of a data centre contemplated in any ESA, (iii) changes in electricity, natural gas and carbon prices in markets in which the Company operates (iv) changes in energy commodity market prices and the use of derivatives, (v) regulatory and political environments including changes to environmental, climate, financial reporting, market structure and tax legislation, (vi) disruptions, or price volatility within the Company's supply chains, (vii) generation facility availability, wind capacity factor and performance including maintenance expenditures, (viii) ability to fund current and future capital and working capital needs, including in respect of the funding commitments under the MOU with Apollo, (ix) acquisitions and developments including timing and costs of regulatory approvals and construction, (x) changes in the availability of fuel, (xi) ability to realize the anticipated benefits of acquisitions, (xii) limitations inherent in the Company's review of acquired assets, (xiii) changes in general economic and competitive conditions, including inflation and recession, and (xiv) changes in the performance and cost of technologies and the development of new technologies, new energy efficient products, services and programs.
For further discussion on risks, assumptions, and uncertainties that could cause actual results to differ from anticipated results, refer to the "Risks and Risk Management" section of the Company's 2024 Integrated Annual Report, prepared as of February 25, 2025 and to the risks, assumptions, and uncertainties described in other documents filed by Capital Power with the Canadian securities regulators from time to time which are available on SEDAR+ at sedarplus.ca.
Readers are cautioned not to place undue reliance on any such forward-looking information, which speak only as of the date made and that other events or circumstances, although not listed above, could cause Capital Power's actual results to differ materially from those estimated or projected and expressed in, or implied by the forward-looking information. Capital Power does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking information to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
Territorial Acknowledgement
In the spirit of reconciliation, Capital Power respectfully acknowledges that we operate within the ancestral homelands, traditional and treaty territories of the Indigenous Peoples of Turtle Island, or North America. Capital Power's head office is located within the traditional and contemporary home of many Indigenous Peoples of the Treaty 6 region and Métis Homeland. We acknowledge the diverse Indigenous communities that are located in these areas and whose presence continues to enrich the community.
About Capital Power
Capital Power (TSX: CPX) is a growth-oriented power producer with approximately 12 GW of power generation at 32 facilities, plus battery energy storage across North America. We prioritize safely delivering reliable and affordable power communities can depend on, building lower-carbon power systems, and creating balanced solutions for our energy future. We are Powering Change by Changing Power TM .
For more information, please contact :
Investor and Media Relations
Media Relations
Katherine Perron
(780) 392-5335
kperron@capitalpower.com
Investor Relations
Noreen Farrell
(403) 461-5236
investor@capitalpower.com
