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Capital Power closes acquisition of 875-MW gas plant in Ontario

Capital Power Corp. completed the C$387 million acquisition of the 875-MW Goreway power plant in Ontario from JERA Co. Inc. and Toyota Tsusho Corp.

The company also assumed C$590 million of project-level debt and partially funded the acquisition with net proceeds from its public offerings of subscription receipts and preferred shares.

The Goreway is a combined-cycle, natural gas-fired facility located in Branton, Ontario. It operates under a 20-year accelerated clean energy supply contract with the Ontario Independent Electricity System Operator, expiring in June 2029.

The deal is expected to generate approximately C$124 million of adjusted EBITDA and C$50 million of adjusted funds from operations, or AFFO, in 2020. the purchase is forecasted to be 27 Canadian cents accretive to AFFO per share in 2020, representing an approximately 6% growth. For the 2020-2023 period, average annual adjusted EBITDA and AFFO are estimated to be C$127 million and C$56 million, respectively, the company said.

Following the deal closing, Capital Power raised its full-year 2019 AFFO guidance to a range of C$485 million to C$535 million from C$460 million to C$510 million previously, and its adjusted EBITDA guidance to a range of C$870 million to C$920 million from C$800 million to C$850 million previously.