AGL offloads wind, solar investment to Future Fund for up to $750m

Energy giant AGL has offloaded almost its entire stake in wind and solar business Tilt Renewables for $750 million.

The listed Australian gas and electricity provider confirmed reports of the sale to fellow investors Queensland Investment Corporation and Australia’s sovereign wealth pool, Future Fund, on Monday.

The deal is subject to approval from the Australian Competition and Consumer Commission and Foreign Investment Review Board, with proceeds expected to go towards more “dispatchable capacity” — such as gas and battery storage — as well as bolstering AGL’s balance sheet.

AGL had owned 20 per cent of the business after acquiring Tilt alongside Queensland Investment Corporation (QIC) and Future Fund as part of the Powering Australian Renewables Fund in 2021.

The deal will see AGL reduce its exposure to developing capital intensive renewables projects, with the company agreeing instead to buy more energy generated from Tilt’s Palmer and Waddi wind farm under 15-year agreements.

AGL buys about 1.6GW of renewable generation capacity from Tilt under existing long term power purchase deals.

AGL managing director Damien Nicks said the transaction affirmed the company’s commitment to realising value in its portfolio and recycling capital to invest in new capacity.

Tilt had been listed on the New Zealand Stock Exchange and the Australian Securities Exchange prior to that since 2016. The business owns several wind farms, mostly in New South Wales, and two solar farms.

The company is selling 19.9 per cent of its 20 per cent stake in Tilt, with the value of the deal to be fully determined once based on closing adjustments.

AGL shares were up 2.13 per cent to $9.11 apiece just after 2.30pm.