Apollo Funds and Capital Power Corporation entered into a memorandum of understanding on Tuesday, December 10, 2025, to create a joint investment vehicle that will acquire merchant natural‑gas generation assets in the United States. Apollo will contribute up to $2.25 billion of equity, while Capital Power will provide up to $750 million, bringing the total committed equity to $3 billion.
Under the structure, Apollo will hold the majority of the equity—roughly 75%—and will be the primary investor in each acquisition. Capital Power will retain a 25% to 50% working interest in every asset, will operate the plants, and will earn management and performance fees. The partnership allows Apollo to deploy capital into a growing segment of the power market while giving Capital Power a strategic partner that can accelerate its U.S. expansion plans.
The deal aligns with Apollo’s broader strategy to diversify beyond private equity and credit into infrastructure and energy assets. For Capital Power, the partnership is a key enabler of its goal to increase U.S. generation capacity by 50%—about 3.5 GW—by 2030, a target that hinges on meeting the rising electricity demand from data centers and AI workloads. Apollo’s involvement also signals confidence in the continued role of natural gas as a flexible, low‑carbon source for grid stability amid the energy transition.
Analysts at ATB Capital Markets downgraded Capital Power from Outperform to Sector Perform on the day of the announcement, citing valuation concerns. The downgrade reflects investor caution that the company’s ambitious growth plans may be priced too aggressively, even as the partnership provides a clear path to scale its U.S. portfolio.
The partnership also highlights the role of Athene, Apollo’s retirement‑services arm, as a significant capital generator for the firm. While Athene is not directly funding this specific transaction, its strong balance sheet underpins Apollo’s ability to commit $2.25 billion in equity, reinforcing the firm’s capacity to pursue large infrastructure deals.
Together, the MOU positions Apollo and Capital Power to capture a growing niche in the U.S. power market, leveraging natural gas’s flexibility to support data‑center demand while advancing both companies’ long‑term infrastructure strategies.
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