AGL Energy Limited (ASX: AGL) announces a strategic renewable energy divestment in Australia, selling 19.9% of its 20% equity interest in Tilt Renewables. The AGL Tilt Renewables deal values the stake at $750 million, with existing shareholders and entities led by Queensland Investment Corporation and the Future Fund acquiring the interest.
The transaction reflects AGL’s disciplined capital management approach and commitment to recycling capital for future growth investments. Proceeds from the renewable energy divestment in Australia will fund AGL’s investment in flexible, dispatchable capacity whilst providing additional balance sheet flexibility.
Strategic Capital Reallocation Through the AGL Renewable Assets Sale
The AGL Tilt Renewables deal demonstrates the company’s commitment to realising portfolio value through strategic asset sales. AGL’s investment in Tilt Renewables held a carrying value of $321 million as at 30 June 2025. The transaction is expected to result in a gain on sale during FY26, with the final amount determined based on the closing date and customary closing adjustments.
Figure 2: Grid-scale battery installations forming part of AGL’s investment
AGL established the Powering Australian Renewables Fund in 2016 to accelerate the deployment of wind and solar renewable generation across Australia. The company expresses pride in the business it has helped build through Tilt Renewables. The renewable energy divestment in Australia transaction reflects substantial value creation since the fund’s establishment.
Maintaining Strategic Partnership Despite Equity Sale
Tilt Renewables currently provides 1.6 GW of renewable generation capacity to AGL under long-term power purchase agreements. The AGL renewable assets sale partnership has recently strengthened through new commitments. AGL has committed to take 45% of the generation from Tilt’s Palmer Wind Farm for a 15-year term. Additionally, AGL will take 100% of the generation from Waddi Wind Farm for a 15-year term.
Figure 3: large-scale solar generation site showcasing the company’s commitment to renewable energy
The AGL Tilt Renewables deal includes the formation of a strategic partnership advancing both Tilt’s expanding asset portfolio and AGL’s decarbonisation strategy. AGL renewable assets sale facilitates offtake opportunities for a share of Tilt’s existing assets and development pipeline. AGL will continue holding its remaining stake in Tilt following completion of the transaction.
Supporting Decarbonisation Strategy and Growth Targets
AGL Managing Director Damien Nicks confirms the company looks forward to continuing work with Tilt Renewables, Queensland Investment Corporation and the Future Fund as Tilt delivers its development pipeline. The transaction demonstrates AGL’s commitment to realising portfolio value and recycling capital to invest in flexible, dispatchable capacity.
Figure 4: AGL Managing Director and CEO Damien Nicks
AGL works towards its expanded 6 GW target of new firming and renewable projects by FY30. The renewable energy divestment Australia supports this ambition through capital reallocation. The company aims to more than offset any earnings impact of coal and gas recontracting with earnings from significant investment in flexible assets and broader strategy delivery.
FY25 Financial Performance Foundation
AGL reported strong FY25 financial results for the year ended 30 June 2025. Underlying EBITDA reached $2,010 million, down 9% from the prior year. Underlying NPAT stood at $640 million, representing a 21% decrease. The company declared a final dividend of 25 cents per share, fully franked, bringing total dividends to 48 cents per share for FY25.
Figure 5: FY25 financial summary highlighting underlying profit movements across business segments
AGL reported a statutory loss of $98 million for FY25. The decrease in underlying profit was due to lower wholesale electricity prices resetting through contract positions and consumer margin compression. Higher depreciation and amortisation resulted from continued strategic investment in thermal fleet and the first full year of operation of Torrens Island Battery.
Transaction Terms and Regulatory Path for the AGL Tilt Renewables Deal
Completion of the AGL Tilt Renewables deal is subject to conventional conditions precedent. Regulatory approvals from the ACCC and Foreign Investment Review Board are required. The transaction is expected to be completed by Q3FY26, subject to the satisfaction of all regulatory requirements and conditions.
The $750 million transaction value is stated pre-transaction costs and subject to typical completion adjustments. Queensland Investment Corporation’s participation includes clients managed or advised by QIC. Future Fund joins as a co-investor in the renewable energy divestment in Australia transaction.
Market Position and Share Performance
AGL shares trade at AUD 9.060 per share, with the company commanding a market capitalisation of AUD 6.00 billion. The stock has traded within a 52-week range of AUD 8.030 to AUD 12.140 per share. The company supplies around 4.6 million energy, telecommunications and Netflix customer services as of 30 June 2025.
Figure 6: Share performance over the three months
AGL operates Australia’s largest private electricity generation portfolio within the National Electricity Market. The portfolio comprises coal and gas-fired generation, renewable energy sources such as wind, hydro and solar, and batteries and other firming and storage technology. The company builds on its history as one of Australia’s leading private investors in renewable energy.
Frequently Asked Questions (FAQs)
Q1: How much is AGL selling its stake in Tilt Renewables for?
AGL is divesting 19.9% of its 20% equity interest in Tilt Renewables for $750 million.
Q2: Who is buying AGL’s stake in Tilt Renewables?
The equity interest is being acquired by existing shareholders and other entities led by Queensland Investment Corporation and the Future Fund.
Q3: Will AGL still have a relationship with Tilt Renewables after the sale?
Yes, AGL will continue holding its remaining stake in Tilt Renewables following completion of the transaction.
Q4: What will AGL do with the proceeds from the sale?
AGL will use the proceeds from the renewable energy divestment in Australia to continue delivering its strategy, including funding investment in flexible, dispatchable capacity.
