Power company ENGIE North America and climate-focused investment management firm Hannon Armstrong announced a partnership in which the firms will jointly invest in a portfolio of distributed generation solar and solar-plus-storage assets located across the United States. According to the companies, the 70 MW portfolio consists of a diversified set of community solar and commercial & industrial (C&I) ground-mounted, carport and rooftop solar and solar-plus-storage projects located across the U.S., including Massachusetts, Illinois, Vermont, California, Texas, and Arizona. The agreement will secure $172 million of investment for the portfolio.
The announcement marks the expansion of the relationship between the investor and the power company, which includes a recent deal announced in September, which saw Hannon Armstrong acquire a 49% stake in a portfolio of 9 onshore wind projects and 4 solar projects from ENGIE.
Gwenaëlle Avice-Huet, ENGIE Executive Vice President, in charge of the Renewable and Hydrogen Business Units France, and the Global Renewable Business Line, and CEO of the North America Business Unit, said:
“ENGIE is pleased to partner with Hannon Armstrong on this portfolio, which further demonstrates ENGIE’s leadership and strong commitment to climate action goals towards its clients. This new partnership reinforces the ambitions of our organizations. This program signals further forward momentum as we work alongside our customers towards a carbon neutral future.”
Hannon Armstrong Chairman and CEO Jeffrey W. Eckel, said:
“We are delighted to expand our programmatic relationship with ENGIE with this latest agreement. This partnership highlights one of the key strengths of our historic core value proposition to clients of executing on scalable investment solutions for smaller, distributed clean energy projects that are essential to a climate-positive future.”
According to terms of the agreement, ENGIE will retain partial ownership in the portfolio, and provide development, construction, operational, asset management, and administrative services, while Hannon Armstrong will provide capital to ENGIE through a unique structure that will bring efficiency to a forward flow of projects, leveraging tax equity financing through an upper-tier arrangement with Morgan Stanley.
Hannon Armstrong stated that its collaboration with Morgan Stanley on this portfolio represents an expansion of the firms’ relationship in recognition of Morgan Stanley becoming the first U.S. bank to commit to disclosing portfolio greenhouse gas emissions and backing the push toward unified measurement of financed emissions via the Partnership for Carbon Accounting Financials (PCAF). Morgan Stanley announced in July 2020 that it was joining the PCAF as a steering committee member. Hannon Armstrong announced in September that it had also joined the PCAF.