AGL announced yesterday it was offloading the majority of its 20 per cent stake in Tilt Renewables as it recycles capital. What does this mean?
The transaction will support “balance sheet flexibility” and enable AGL to free up funds to underpin other initiatives.
One initiative is investment in “flexible, dispatchable capacity”, which refers to, in its simple form, energy sources that provide electricity on-demand.
This includes battery energy storage systems, or BESS, which AGL has been keenly focused on in recent times. The gentailer’s Liddell BESS, co-located with its mothballed Liddell coal-fired power station, is being constructed as we speak, with hopes of it coming online in early 2026.
AGL’s smaller 50MW Broken Hill BESS became operational in August 2024, while the company is also working on its Tomago, Beresfield and Muswellbrook batteries in NSW, to name a few, as well as its Tuckeroo battery in Queensland.
AGL will continue its partnership with Tilt through power purchase agreements (PPA) at the Palmer wind farm for 45 per cent of generation over a 15-year term, and at the Waddi Waddi wind farm for 100 per cent of generation over the same timeframe.
The Queensland Investment Corporation (QIC) paid $750 million for the 19.9 per cent stake, moving it to 99.9 per cent ownership of Tilt. According to the QIC, this helps consolidate Tilt’s “long-term Australian shareholder base”.
AGL managing director Damien Nicks said the transaction doesn’t signal the end of its involvement with Tilt and the QIC.
“We look forward to continuing to work with Tilt, QIC and the Future Fund as Tilt delivers its development pipeline,” he said.
“The transaction demonstrates our commitment to realising value in our portfolio and recycling capital to invest in flexible, dispatchable capacity as we work towards our expanded 6GW target of new firming and renewable projects by FY30 (2029–30 financial year).”
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