The AGL Energy Limited (ASX: AGL) share price is taking the foot off the gas on Tuesday amid an eventful morning.
Shares in the energy retailer are coming under pressure after announcing a monumental deal to help make green strides. At the time of writing, the AGL share price is swapping hands at $8.38, representing a decrease of 2.8%.
Green funding secured amid Mike Cannon-Brookes turmoil
This week is shaping up to be a pivotal one for the AGL share price and the company more broadly. However, the eventfulness is not translating into a positive reception. Instead, the energy company appears to be shrouded in uncertainty now more than ever.
In a release, AGL revealed $2 billion in funding from Global Infrastructure Partners (GIP) for its Energy Transition Investment Partnership (ETIP). This will see the New York City investment fund take a 49% equity interest in AGL's ETIP.
Importantly, the fund will be used to develop, own, and operate an initial estimate of 2.7 gigawatts of renewable assets under the proposed AGL demerged entity, Accel Energy. The deal will also see GIP pay an upfront $40 million in cash to Accel as part of its $94 million investment.
While the deal is significant for the company's plans to turn a new leaf, the announcement is clouded by the latest development in the Mike Cannon-Brookes saga. As my colleague Tristan detailed covered, the Atlassian billionaire is looking to foil the AGL demerger.
To do this, Cannon-Brookes has taken an 11.3% stake in the company. Nonetheless, the weakness in the AGL share price is prevailing.
What does the funding really mean?
Essentially, the $2 billion of funding will help AGL Energy in establishing itself as a renewable energy provider. As noted in the announcement, projects already mapped out include:
- Liddel Battery (NSW)
- Loy Yang Battery (VIC)
- Bells Mountain Pumped Hydro (NSW)
- Barn Hill Wind Farm (SA)
Commenting on the deal, AGL CEO and managing director Graeme Hunt said:
There was strong interest shown in ETIP by a number of globally renowned infrastructure investors, and we are excited to have selected Global Infrastructure Partners. The establishment of ETIP will support Accel in funding low-carbon developments whilst providing Global Infrastructure Partners exclusive access to a portfolio of investments. If all the Foundation Projects in ETIP were to proceed, it would represent an investment of approximately $4.7 billion into the future of energy in Australia.
AGL share price still ahead
Despite the drama surrounding the energy giant and its dance with Mike Cannon-Brookes, the AGL share price has delivered so far this year.
Notably, major ASX-listed utility companies have all enjoyed green performances in 2022. However, AGL has surpassed its peers with a gain of 31.6% year-to-date.
At present, AGL holds a market capitalisation of $5.59 billion.
