Capital Power outlines 2030 growth targets

Executive Summary

• Capital Power Corp. hosted its 2025 Investor Day, outlining strategic priorities, 2030 growth targets, and 2026 financial guidance.
• The company announced a Memorandum of Understanding (MOU) with Apollo Global Management to form a $3-billion U.S. partnership for acquiring merchant natural gas assets.
• A binding MOU was signed with an investment-grade data centre developer for a 250 MW electricity supply agreement (ESA) in Alberta, supporting AI infrastructure growth.

Key Details

• 2030 Strategic Targets:
  • 50% cumulative increase in U.S. capacity (approx. 3.5 gigawatts).
  • 13% to 15% annual total shareholder return (TSR).
  • 8% to 10% annual adjusted funds from operations (AFFO) per-share growth.
  • 2% to 4% annual dividend growth target.
• Apollo Partnership (MOU):
  • Total potential committed equity: $3 billion (U.S.).
  • Apollo Funds equity commitment: Up to $2.25 billion (U.S.).
  • Capital Power equity commitment: $750 million (U.S.).
  • Capital Power will hold a 25% to 50% working interest in each acquisition.
  • Capital Power will operate acquired assets and receive management and performance fees.
  • Goal: Accelerate U.S. natural gas growth strategy and expand earnings.
• Alberta Data Centre Agreement (Binding MOU):
  • Counterparty: Investment-grade data centre developer (name not disclosed).
  • Capacity: 250 MW.
  • Term: Long-term, 10+ years.
  • Anticipated Start Date: 2028.
  • Backed by Capital Power's Alberta-based power generation portfolio.
  • Termination fee payable to Capital Power if a final agreement is not reached.
• 2026 Financial Guidance:
  • Adjusted EBITDA: $1,565 million to $1,765 million.
  • Adjusted Funds From Operations (AFFO): $890 million to $1,010 million.
  • Sustaining Capital: $290 million to $330 million.
  • Dividend Growth Target: 2%.
  • Guidance includes full-year contribution from recently acquired PJM assets.
  • Excludes effects of asset sell-downs, future acquisitions, or unplanned outages.

Notable Quotes

• "We have a long-standing track record of delivering industry leading returns from natural-gas-fuelled 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.