HASI Invests in 605 MW Renewables Portfolio Owned and Operated by AES

Rhea-AI Summary

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) announced an investment in a portfolio of renewable energy assets developed, owned, and operated by The AES Corporation (AES), a Fortune 500 global energy company. The investment involves a structured equity investment in a 605-megawatt portfolio of solar and solar-plus-storage assets across 11 states, with a weighted average remaining contract life of 16 years. The portfolio's cash flows are contracted with a diverse group of predominately investment-grade corporate, utility, and municipal off-takers. This investment expands the longstanding relationship between HASI and AES, demonstrating a commitment to accelerating the energy transition and offering diversification and scale to HASI's balance sheet.

Insights

Financial Analyst

The structured equity investment by HASI in AES's renewable energy assets represents a strategic move in the renewable energy sector, with potential implications for investor sentiment and market dynamics. The investment in a 605-megawatt portfolio of solar and solar-plus-storage assets diversifies HASI's holdings and strengthens its position in the market. This move may signal confidence in the long-term viability of renewable energy projects and their ability to generate stable cash flows, particularly given the weighted average remaining contract life of 16 years.

For stakeholders, the transaction suggests a robust partnership between HASI and AES, which could lead to additional collaborative opportunities. The focus on investment-grade off-takers also indicates a lower risk profile for the cash flows, which might be appealing to risk-averse investors. However, the reliance on a single operator, AES, for the management of the assets could introduce operational risk if AES encounters any performance issues.

Energy Market Analyst

The renewable energy sector is witnessing a significant transition, with increased emphasis on the alignment of energy supply with demand. HASI's investment in AES's renewable energy portfolio underscores the growing trend of energy companies investing in community solar and commercial & industrial solar assets. These investments are particularly noteworthy as they include a substantial component of battery energy storage, a critical element for addressing intermittency issues associated with solar power.

The geographical spread of the portfolio across 11 states and seven power markets enhances the resilience against regional market fluctuations and policy changes. This broad distribution also allows for a more nuanced understanding of different market dynamics and regulatory environments, which is essential for the long-term success of renewable energy investments.

Sustainability Analyst

This investment is indicative of the growing trend of sustainable investing, reflecting both HASI and AES's commitment to the energy transition. The inclusion of a large number of community solar projects within the portfolio aligns with broader societal goals of decentralized energy production and increased accessibility. It also reflects an understanding that investment in renewable energy can be both a business opportunity and a move towards corporate social responsibility.

Moreover, the focus on investment-grade off-takers for the portfolio's cash flows suggests a strategic approach to sustainability that prioritizes financial stability and risk management. Stakeholders interested in the environmental impact of their investments will likely view the long-term nature of these contracts and the associated stable cash flows as a positive development in the move towards a more sustainable energy future.

ANNAPOLIS, Md.--(BUSINESS WIRE)-- HASI (NYSE: HASI), a leading investor in climate solutions, today announced an investment in a portfolio of renewable energy assets developed, owned and operated by The AES Corporation (NYSE: AES), a Fortune 500 global energy company and one of the largest developers and operators of clean power in the United States.

Pictured: Illustrative solar and solar-plus-storage projects included in the HASI and AES renewables portfolio. (Photos courtesy of AES)

Per the agreement, which reached financial close on December 22, 2023, HASI will make a structured equity investment in an approximately 605-megawatt (MW) portfolio of solar and solar-plus-storage assets spanning seven power markets and 11 states: Arizona, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Massachusetts, New York, Rhode Island, and Vermont. The portfolio consists of more than 200 operational renewable energy projects, composed primarily of community solar and commercial & industrial solar assets, with more than a third of the total capacity paired with battery energy storage.

With a weighted average remaining contract life of 16 years, the portfolio's cash flows are contracted with a diverse group of predominately investment-grade corporate, utility, and municipal off-takers. AES will continue to own and operate the assets.

The transaction further expands the longstanding relationship between HASI and AES. In January 2023, HASI announced a common equity investment with AES in an approximately 1.3-GW portfolio of operating utility-scale solar and wind projects. Additionally, HASI and AES' clean energy business in the U.S. have a six-year track record of successful solar land transactions.

“HASI is immensely proud to advance our partnership with AES with this latest transaction,” said Susan Nickey, Chief Client Officer of HASI. “Together, we share an unwavering commitment to accelerating the energy transition. AES’ exceptional leadership in closely aligning renewable energy supply with demand is precisely the focus our industry needs for the next phase of growth. This investment not only significantly expands our programmatic investment partnership but also offers diversification and scale to our balance sheet.”

“AES’ purpose is to accelerate the future of energy,” said James Marshall, Chief Financial Officer for AES’ clean energy business in the U.S. “This investment in AES’ operating renewables portfolio represents a continuation of our partnership with HASI that will free up capital to develop and build new clean energy projects in the U.S.”

About HASI

HASI (NYSE: HASI) is a leading climate positive investment firm that actively partners with clients to deploy real assets that facilitate the energy transition. With more than $11 billion in managed assets, our vision is that every investment improves our climate future. For more information, please visit hasi.com.

Forward-Looking Statements

Some of the information contained in this press release is forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that are subject to risks and uncertainties. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, we intend to identify forward-looking statements.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements include those discussed under the caption “Risk Factors” included in our most recent Annual Report on Form 10-K as well as in other periodic reports that we file with the U.S. Securities and Exchange Commission

Forward-looking statements are based on beliefs, assumptions and expectations as of the date of this press release. We disclaim any obligation to publicly release the results of any revisions to these forward-looking statements reflecting new estimates, events or circumstances after the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240104710826/en/

Media:

Gil Jenkins

media@hasi.com

443-321-5753



Investors:

Neha Gaddam

investors@hasi.com

410-571-6189

Source: Hannon Armstrong Sustainable Infrastructure Capital, Inc.

FAQ

What is the investment announced by Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI)?

HASI announced an investment in a portfolio of renewable energy assets developed, owned, and operated by The AES Corporation (AES), a Fortune 500 global energy company.

What is the size of the portfolio of renewable energy assets in which HASI invested?

HASI made a structured equity investment in an approximately 605-megawatt (MW) portfolio of solar and solar-plus-storage assets spanning seven power markets and 11 states.

What is the contract life of the renewable energy portfolio in which HASI invested?

The portfolio has a weighted average remaining contract life of 16 years.

Who are the off-takers of the cash flows from the renewable energy portfolio in which HASI invested?

The portfolio's cash flows are contracted with a diverse group of predominately investment-grade corporate, utility, and municipal off-takers.

What does the investment by HASI in renewable energy assets demonstrate?

The investment demonstrates a commitment to accelerating the energy transition and offers diversification and scale to HASI's balance sheet.