Sydney-based AGL Energy is considering launching a co-investment vehicle to bring in external capital to fund its renewables developments, two sources said.

It will be similar to the Powering Australian Renewables Fund (PARF) that ASX-listed AGL formed with QIC and the Future Fund in 2016, they said. Macquarie Capital is advising AGL on the plans, the sources added.

PARF was launched in July 2016 with an AUD 2bn-AUD 3bn (USD 1.3bn-USD 2bn at today’s rates) target. Some of the first assets it invested in included the 102 MW Broken Hill and 53 MW Nyngen solar farms; the 200 MW Silverton wind farm, and the 453 MW Cooper’s Gap wind farm.

In 2021, the Powering Australian Renewables Fund (PowAR), the renamed PARF, 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 assumed the Australian assets, taking on a development team at the same time. PowAR’s assets were subsequently folded into the Tilt portfolio, and the whole entity was rebranded as Tilt Renewables, as previously reported.

Last month, AGL agreed to sell its 20% stake in Tilt Renewables to its co-investors for AUD 750m.

AGL, one of Australia’s biggest energy generators and retailers, has previously said that it will need to source 12 GW of new capacity to transition out of fossil fuels. It has also said that it is quite happy to buy green electrons without owning the assets that generate them.

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 2022, AGL shareholders fought off a proposal to demerge the company. At that time, Global Infrastructure Partners had won the right to take a 49% stake in AGL’s AUD 2bn, 2.7 GW Energy Transition Investment Partnership.

GIP’s investment was conditional on the demerger going ahead but, after it was defeated, the parties did not rule out working together again.

A spokesperson for AGL declined to comment.