AGL Energy announces fund for more than 1 GW of renewables

Feb 10, 2016 14:58 CET by Ivan Shumkov

February 10 – Australian power producer AGL Energy Ltd (ASX:AGK) on Wednesday launched a fund through which it plans to finance and develop more than 1 GW of renewable energy projects at a cost of up to AUD 3 billion (USD 2.1bn/EUR 1.9bn).

The company said in a statement it will seed the new fund with its Nyngan and Broken Hill solar projects, totalling 155 MW, and will take a cornerstone equity stake. Meanwhile, managing director Andy Vesey told Bloomberg that the new vehicle will initially focus on wind power. The postponed 300-MW Silverton wind project in New South Wales and the 350-MW Coopers Gap wind venture in Queensland are both expected to benefit, according to the report.

The fund will kick start at least AUD 2 billion worth of schemes.

Meanwhile, the company has decided that it will no longer consider the exploration and production (E&P) of natural gas as a core business. The reason for that is the volatility of commodity prices and long development lead times. As a result, it expects to incur an impairment charge of AUD 640 million after tax against the carrying value of its gas E&P assets.

“The strong performance of our core businesses highlights that we are well positioned to capitalise on the evolution occurring in the energy sector. Part of that evolution is supporting Australia’s transition to a lower carbon generation portfolio and our launch today of the Powering Australian Renewables Fund demonstrates AGL’s commitment,” Vesey commented in a press statement.

Also today, AGL said it has invested USD-20-million in US-based energy storage company Sunverge Energy Inc as part of a USD-36.5-million Series C round of financing.

(AUD 1.0 = USD 0.711/EUR 0.631)

(USD 1.0 = EUR 0.885)

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