Capital Power to pursue U.S. acquisitions, negotiate Alberta data centre deal
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Capital Power Corp. has announced agreements to pursue U.S. natural gas power acquisitions and to supply electricity to a data centre developer in Alberta.
The Edmonton-based power generator said Wednesday it has reached a memorandum of understanding with funds managed by affiliates of New York-based Apollo Global Management. That MOU will see Capital Power and Apollo Funds form a US$3-billion investment partnership to buy merchant natural gas assets across the United States.
Apollo is to commit US$2.25 billion in equity, with Capital Power pitching in the rest and able to choose to take a 25 to 50 per cent interest in each acquisition. Capital Power would also operate the acquired power plants and receive management and performance fees.
Separately, Capital Power said it has entered into a binding MOU to negotiate a 250-megawatt electricity supply agreement with an unidentified investment-grade data centre developer in Alberta with an expected 2028 start date. Capital Power has said its natural gas-powered Genesee Generating Station west of Edmonton would be an ideal fit for such a project.
“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,” Capital Power chief executive Avik Dey said in a news release.
The move comes as the Alberta government looks to attract $100 billion in data centre investment over five years. It takes an enormous amount of power to run and power the sprawling facilities that house the computing firepower needed in the burgeoning artificial intelligence industry.
A wide ranging energy accord the Alberta and federal governments signed last month calls for the implementation of a policy framework by July 1 to incentivize large investments in data centre development.
Meanwhile, Capital Power says it’s expecting its adjusted funds from operations to range from $890 million to $1.01 billion in 2026. Adjusted earnings before interest, taxes, depreciation and amortization are expected to come in at $1.57 billion to $1.77 billion.
It has also earmarked $290 million to $330 million in sustaining capital for next year.
Capital Power has also set a target of adding 50 per cent more U.S. power generating capacity by 2030. It’s also aiming for a 13 to 15 per cent annual total shareholder return, eight to 10 per cent annual adjusted funds from operations growth and two to four per cent dividend growth over that period.
This report by The Canadian Press was first published Dec. 10, 2025.
Companies in this story: (TSX:CPX)