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AKRON, Ohio - Babcock & Wilcox Enterprises, Inc. (NYSE:BW) announced Wednesday a strategic partnership with Denham Capital’s Sustainable Infrastructure arm to address the growing power demands of data centers in the U.S. and Europe.
The partnership aims to convert coal-fired power plants to natural gas solutions as U.S. data centers are expected to require 65 gigawatts of power between 2025 and 2028, approximately 45 gigawatts more than existing capacity can support. While the market opportunity is substantial, InvestingPro data reveals that B&W faces financial headwinds with a significant debt burden of $517 million and negative free cash flow, factors that investors should carefully consider. Get access to 18 additional ProTips and comprehensive analysis with an InvestingPro subscription.
Under the agreement, B&W will provide engineering expertise and technology while Denham will lead development, financing, and market strategy. The companies plan to leverage existing interconnected power assets to address immediate needs, noting that new power projects typically face a five-year median interconnection timeline.
"Data centers have created an unprecedented and immediate demand for power generation, the likes of which we have not seen in nearly two decades," said Justin DeAngelis, Global Head of Sustainable Infrastructure at Denham Capital, in the press release.
Kenneth Young, B&W Chairman and CEO, stated that the partnership positions the companies to "quickly and effectively identify opportunities to leverage underutilized coal-fired power plants" for data center power needs.
The companies described natural gas conversion as a "bridge for the clean energy transition" until renewable energy capacity can match electricity demand growth. Denham plans to announce a dedicated portfolio company focused on delivering these solutions.
The initiative comes as power infrastructure faces significant pressure from artificial intelligence and data center growth, with approximately 2,200 gigawatts of projects currently in interconnection queues across the United States. With a high EBITDA multiple of 47.7x and current ratio of 1.0, InvestingPro’s detailed financial health analysis and Fair Value calculations provide crucial insights for investors evaluating B&W’s position in this expanding market. Access the full Pro Research Report for comprehensive analysis of B&W’s growth potential and risk factors.
In other recent news, Babcock & Wilcox Enterprises reported a significant loss for the second quarter of 2025, with earnings per share at -$0.63, which was much lower than the expected -$0.07. The company’s revenue also fell short of expectations, coming in at $144.1 million compared to the anticipated $182.07 million. Despite these disappointing earnings, DA Davidson raised its price target for Babcock & Wilcox to $1.50 from $1.00, while maintaining a Neutral rating. This adjustment reflects the company’s recent divestiture activities and measures taken to improve its capital position, such as extending debt maturities. Additionally, Babcock & Wilcox has regained compliance with the New York Stock Exchange’s listing standards after its average stock price exceeded the minimum requirement. These developments highlight the company’s ongoing efforts to stabilize its financial footing amid challenging conditions.
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