Maryland-based Hannon Armstrong, the first U.S. public company solely dedicated to investments in climate change solutions, believes its investment in a major solar and wind energy project in Oklahoma and four other states will be highly profitable.
Entering a newly-formed partnership with ENGIE S.A., the largest independent power producer in the world, the two will own a 2.3 gigawatt portfolio of wind and utility-scale solar assets to be built in Oklahoma, Kansas, Texas, South Dakota and Virginia.
On commissioning, the 2.3 GW portfolio will be comprised of 1.8 GW of onshore wind and 0.5 GW of utility-scale solar photovoltaic (PV) projects (13 projects in total) located in five states. Hannon Armstrong will participate in the cash flows from the operations of this diversified portfolio of renewable energy projects, while ENGIE will retain a controlling share in the portfolio and continue to manage the assets.
“We have a common mission to accelerate the rapid adoption of climate change solutions, and we are pleased to partner with ENGIE once again with this new investment that adds significant scale and diversity to our portfolio,” said Hannon Armstrong Chairman and CEO Jeffrey W. Eckel. “Continuing to build a programmatic investment platform allows both firms to make the investment process more aerodynamic and cost-effective for ENGIE’s ultimate customers,” added Eckel.
“The U.S. is a key growth market for our renewables business, where we are accelerating fast, from 0 MW in 2018 to 2 GW that should be commissioned in 2020. We have a strong pipeline of opportunities and a solid development and operational platform to grow from. We are delighted to have partnered with Hannon Armstrong, a company solely dedicated to investments in climate change solutions,” said Gwenaelle Avice-Huet, Executive Vice-P
- With a weighted average contract life of 13 years, the portfolio’s cash flows are contracted with highly creditworthy off-takers who enjoy a weighted average credit rating of A+, including Amazon, Allianz, Ingersoll Rand, Microsoft,T Mobile, Target, Walmart, and Xcel Energy.
- Once fully funded, this portfolio is expected to significantly increase and diversify Hannon Armstrong’s balance sheet portfolio and support continued growth in recurring Net Investment Income.
- The portfolio includes nine onshore wind and four utility-scale solar projects located in five states, representing 2.3 GW of gross generating capacity in aggregate. Under the agreement, Hannon Armstrong will take immediate ownership of 49% of 663 megawatts (MW) from four operating onshore wind projects. The remaining 1.6 GW of projects (five onshore wind and four utility-scale solar PV projects) currently under construction will be transferred into the partnership upon commissioning.
- Assets are located in geographically diversified wind and solar resource regions and wholesale power markets, including Electric Reliability Council of Texas (ERCOT), Midcontinent Independent System Operator (MISO), PJM Interconnection (PJM), and Southwest Power Pool (SPP).
Source: Business Wire