Under the first agreement, Capital Power will acquire 100% of CXA La Paloma, which owns the 1.06GW La Paloma natural gas-fired power plant located in California, while a second agreement will see the company take a 50% stake in the 1.09GW Harquahala natural gas-fired power facility in Arizona
Capital Power to acquire stakes in the La Paloma and Harquahala natural gas-fired power plants in the US. (Credit: cwizner from Pixabay)
Canada-based Capital Power has agreed to acquire stakes in two contracted combined-cycle gas generation facilities in the US with a combined capacity of more than 2GW for $1.1bn.
In this connection, the company has signed two separate definitive agreements with CSG Investments, a subsidiary of Beal Financial.
Under the first agreement, Capital Power will acquire 100% of CXA La Paloma, which owns the 1.06GW La Paloma natural gas-fired power plant located in Kern County, California.
The second agreement relates to the 1.09GW Harquahala natural gas-fired power facility in Maricopa County, Arizona. The owner of the power plant is New Harquahala Generation.
A newly formed 50-50 partnership between Capital Power Investments and an affiliate of a fund managed by BlackRock’s Diversified Infrastructure business will acquire 100% of New Harquahala Generation.
As part of the partnership, Capital Power and BlackRock will each finance 50% of the cash consideration for the acquisition of the Harquahala natural gas-fired facility.
Last month, Capital Power signed a deal worth $100m to acquire a 50.1% stake in the 265MW Frederickson 1 Generating Station in Washington, US.
The completion of the latest deals along with the stake in the Frederickson 1 generating station will make the company’s gas-fired generation fleet the fifth largest in North America, said Capital Power.
Besides, the deals will enable it to have a balanced geographic footprint across Canada and the US on a net operating capacity basis.
The acquisitions of the natural gas-fired power plants are estimated to bring an average annual adjusted EBITDA of about $265m for the 2024-2028 period.
Capital Power CEO and president Avik Dey said: “Capital Power’s acquisition of La Paloma and the partnership in Harquahala’s gas generation assets marks a significant milestone in our strategic growth.
“These plants are well positioned to bolster our current portfolio and align with our commitment to providing reliable, affordable power solutions that support a balanced approach to the energy transition.”
Subject to regulatory approvals and other customary conditions, the transactions are expected to be completed in Q1 2024.