Climate-focused investment management firm Hannon Armstrong Sustainable Infrastructure Capital announced today a preferred equity investment in a 1.6 GW diversified and highly contracted portfolio of onshore wind and utility-scale solar projects, developed and managed by Clearway Energy Group.
Clearway is one of the largest developers and operators of clean energy in the US with a pipeline of 9 GW of renewable energy through 2022. According to Hannon Armstrong, today’s announcement brings together the investor’s expertise in providing long-term investment for climate solutions with the Clearway’s world-class development and asset owner-operator experience.
Hannon Armstrong Chairman and CEO Jeffrey W. Eckel said:
“We are pleased to expand our relationship with Clearway Energy Group through a preferred equity investment in this portfolio of renewable assets. Clearway’s mission to accelerate the world’s transformation to a clean energy future is aligned with our purpose as a climate-positive investor. These assets will be a significant addition to our portfolio, offering increased scale and diversity to our business and supporting continued growth in recurring Net Investment Income.”
The portfolio includes a combination of 7 projects across 4 states, including 3 onshore wind projects (874 MW), a utility scale solar project (192 MW), and 3 utility-scale solar projects with co-located storage (395 MW). Hannon Armstrong stated that the portfolio has a weighted average contract life of greater than 14 years, with cash flows contracted with a diversified group of predominately investment-grade corporate, utility, university, and municipal off-takers.
Hannon Armstrong will hold a preferred equity interest in a number of holding companies owning the cash equity interests in individual portfolio operating projects and will participate in the cash flows from such projects. The remaining ownership of cash equity interests in the holding companies will be held by Clearway Energy, Inc. a publicly traded affiliate of Clearway Energy Group.
Hannon Armstrong has funded approximately $200 million of its investment to date and anticipates its total investment in the portfolio will be approximately $663 million, with the remaining portion funded over the next 2 years. According to the company, the investment will avoid an estimated 703,000 metric tons of CO2e annually, equivalent to the CO2e emissions from the annual electricity consumption of approximately 119,000 U.S. homes.
Craig Cornelius, Chief Executive Officer at Clearway Energy Group, LLC, said:
“We are thrilled to partner with Hannon Armstrong on such an impactful portfolio transaction. This geographically diverse portfolio of wind, solar, and energy storage projects represents the economic opportunity of renewable energy in every corner of this country. Taken together, more than 2,500 American jobs will be created to build and operate these clean energy assets, which will go on to supply clean low-cost power to hundreds of thousands of households and businesses across the United States. This agreement with our investment partners will be pivotal in Clearway’s continued ability to provide clean energy at the scale our country demands while helping to deliver on investors’ growing interest in climate change solutions.”