AGL Energy (AGL), Australia’s second-largest energy retailer, has launched a new vehicle that aims to deploy between A$2 billion (€1.26 billion; $1.42 billion) and A$3 billion to develop more than 1 gigawatt (GW) of renewable generation.
Dubbed Powering Australian Renewables Fund, the vehicle is set up to help the country’s biggest greenhouse gas emitter go greener and meet its share of the 2020 Renewable Energy Target, which is around 1GW.
The company said in a statement that it will seed the new fund with its Nyngan and Broken Hill solar projects, which are the country’s largest utility-scale solar power plants with a total capacity of 155 megawatts (MW).
AGL intends to make a cornerstone commitment of A$200 million to the fund. It is seeking investments from two to three major institutions in Australia, most likely pension funds and infrastructure funds, according to press sources.
A broad mix of funds and banks will be invited to contribute debt for the projects to be backed by the fund, which will aim to have its revenues covered by five to 10-year revenue offtake agreements.
The fund, which will initially focus on large-scale wind farms, is expected to help finance the stalled Silverton wind project in New South Wales and the Coopers Gap venture in Queensland, according to reports.
“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,” said Vesey in a statement.
AGL is also investing $20 million in Sunverge Energy, a California solar power storage developer, as part of an effort to introduce the technology in Australia.
The new moves come a week after the company decided to exit its gas exploration assets due to “difficult market conditions”.