Just over a year after going public, Capital Power Corp. announced a $207-million deal to buy the 275-million megawatt gas-fired Island Generation Facility at Campbell River, B.C. The plant is on Vancouver Island and helps out in peak demand periods when energy from the mainland isn't sufficient.
The company says the deal meets its minimum 9 per cent hurdle rate and will be accretive to cash flow. Until today, Kelson Canada Inc., part of Maryland-based Kelson Holdings, LLC, owned the facility and has operated it since 2002.
Capital Power's IPO closed in July of 2009. Around 700 MW of new capacity has been added since, but this will be the first addition via acquisition. The company plans to fund the deal using a mix of debt and equity.