AGL Energy says it will plough on with its proposed de-merger, despite the share market raid by tech billionaire Mike cannon-Brookes, and has unveiled its partner for a new fund to invest nearly $5 billion in large scale renewables, big batteries and pumped hydro.
AGL, Australia’s biggest coal generator and polluter, is under pressure to abandon its proposed split into two companies and fast-tracks its exit from coal.
Cannon-Brookes, who snapped up an 11.3 per cent voting interest in AGL on Monday night in a $660 million market raid, wants to stop the de-merger and seek to exit coal as early as 2030.
Cannon-Brookes has built his stake with the use of a series of derivative instruments that make him the biggest shareholder, just a little over one month before a shareholder meeting to vote on the demerger.
AGL argues that splitting off the coal assets into newly formed Accel and replacing its portfolio with green industrial hubs and renewables and storage is the best way forward.
But many critics say this is too slow, too risky, and too costly, and Cannon-Brookes has voted with his wallet through his extraordinary market intervention. He describes the demerger as “flawed” and “globally irresponsible.”
Meanwhile, AGL has announced that Global Infrastructure Partners, an investor with more than $100 billion of assets under management, will be a 49 per cent equity partner in the Accel’s new Energy Transition Investment Partnership (ETIP).
This fund – like the PARF before it – is a specially created unit that will fund AGL’s renewable and storage investment, and aims to develop, own and manage about 2.7GW of wind, solar and storage assets.
These include the first stages of the proposed Liddell and Loy Yang big batteries, the Bell Mountain pumped hydro project, the Bowman Creek and barns Hill wind projects, and two other unnamed wind projects in NSW and Victoria.
“These foundation projects will support Accel in maintaining its position as one of the largest operators and off-takers of renewable energy in Australia and to drive Australia’s energy transition by developing new renewable and low-carbon firming assets,” it says.
“It is also intended that additional projects and capacity will be added to the ETIP pipeline in the coming years.”
The fund will will only go ahead if the demerger is approved, although it notes this condition could be waived by the board.
GIP will pay $94 million for its share of the fund, including an up front payment of $40 million, which will be used by AGL for its own equity commitments to the fund.
GIP is a massive investor in infrastructure, including airports, roads, LNG plants and renewables, including the Hornsea offshore wind project, and Naturgy, an energy group which owns a handful of operating and under construction wind projects in Australia.
“There was strong interest shown in ETIP by a number of globally renowned infrastructure investors, and we are excited to have selected Global Infrastructure Partners,” AGL CEO Graeme Hunt said in a statement.
“If all the foundation projects in ETIP were to proceed, it would represent an investment of approximately $4.7 billion into the future of energy in Australia,” he said.
See also: Cannon-Brookes steps in to stop AGL demerger, fast-track coal exit
