"It's a career-defining game," Kompany told British media.
"For us, we will just need to stick to the gameplan. It's going to be very clear. They are going to try and put us under pressure early, try and get that goal, and the longer we are in the game, the more we get a chance."
A score draw will see City advance to the May 28 final in Milan and Kompany backed his team get a goal in Madrid.
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"If you are going to have a draw at home, which is not a bad thing against Real Madrid, then 0-0 is the best result," he added. "I still back my team to score over 180 minutes. I would not expect us not to be able to score one goal."
Madrid were without the injured Cristiano Ronaldo in the first leg but Kompany is not overly concerned at the prospect of having to keep the in-form forward quiet in the reverse fixture.
"The only thing I can say is there's nothing I look forward to more in my career than the chance to play against one of the all-time greats. I take it as a challenge," the Belgian international said.
"Of course I'll need to have a good day. Of course you need the help of your team mates and if your team plays well, you can handle him."
(Reporting by Simon Jennings in Bengaluru; Editing by John O'Brien)
