Australian generator and retailer AGL Energy is considering selling down its stake in developer, Tilt Renewables, according to multiple sources.

One of the sources said that an adviser has already been appointed. Others were less certain.

ASX-listed AGL did not respond to a request for comment.

Tilt owns 1.7 GW of operational assets, 100 MW under construction and a development pipeline of over 5 GW, according to a company announcement last month.

The company’s website lists wind, solar and storage assets in Queensland, New South Wales, Victoria, South Australia and Western Australia.

AGL owns 20% of the group, while the Future Fund and QIC own 40% each.

It could not immediately be determined whether the Future Fund or QIC might exercise any pre-emptive rights to buy AGL’s stake.

After AGL shareholders fought off a proposal to demerge the company in 2022, Australia’s largest coal-fired power generator has been aggressively seeking to buy or build green, firmed power.

The company has said that it will need to source 12 GW of new capacity to transition out of fossil fuels.

But AGL has also said that it is quite happy to buy green electrons without owning the assets that generate them.

On its half year results call last month, AGL said that it was committed to owning and developing new batteries, but any new wind or solar developments would be partnerships.

AGL’s major rival, Origin Energy, has pursued a similar strategy. It bought the 1.6 GW Yanco Delta wind and storage project and then swiftly moved to sell down some of the equity.

In 2021, the Powering Australian Renewables Fund (PowAR) and Mercury NZ bought Tilt Renewables from Infratil for an enterprise value of NZD 3.61bn (USD 2bn) in one of Australasia’s largest renewables acquisitions to date. AGL said it paid AUD 357.6m for its 20% share of the Tilt acquisition.

Mercury took over the New Zealand assets and PowAR, which was owned by AGL, the Future Fund and QIC, assumed the Australian assets. PowAR’s assets were subsequently folded into the Tilt portfolio and the whole entity was rebranded as Tilt Renewables.

The Future Fund, QIC and Tilt were approached for comment.