AGL Energy invests nearly $100m for Kaluza expansion

They also agreed to use Kaluza's platform to improve customer experience.

AGL Energy Limited announced its A$150m ($98.97m) investment in Kaluza to fund the latter’s growth and international expansion.

In a statement, AGL said this will be in the form of preference shares and result in the company holding a 20% interest directly in Kaluza. 

Under this structure, AGL will have input into the strategic direction of Kaluza through representation on the Kaluza Board and access to value for AGL shareholders.

The investment will be funded from cash on AGL’s balance sheet. Completion is expected later in 2024 following the satisfaction of customary conditions precedent.

AGL said they also agreed to work on enhancing customer and agent experience under its Retail Transformation Programme.

Under the deal, AGL will deploy Kaluza into its customer base over the next three years, transferring the four million consumer electricity and gas customer services onto the Kaluza platform. 

“The Retail Transformation Program aims to deliver a reduction in operating costs and capital expenditure, with net benefits expected to commence in [fiscal year 2028] and expected pre-tax cash savings of approximately $70m-$90m annually from [fiscal year 2029,” AGL said.

The program builds on AGL’s existing relationship with Kaluza through its investment in OVO Energy Australia, in which AGL has had a 51% investment since 2021 and now fully owns. 

The estimated implementation costs for the residential and small business customer solution component of the Retail Transformation Program will be around $300m over four financial years beginning 2024. This covers costs associated with program and change management, customer migration, systems integration, and change within supporting platforms. 

A$1=$0.65