Hannon Armstrong and Clearway Energy Inc. join to invest $950 million nearly 2-gigawatt of renewable energy projects in Hawaii, California, Texas, and West Virginia.
Hannon Armstrong Sustainable Infrastructure Capital, Inc. is making a preferred equity investment in a 1.6 (GW) onshore wind and utility-scale solar portfolio developed and managed by Clearway Energy Group, one of the largest developers and operators of renewable energy in the U.S. with a projected portfolio of 9 GW of renewable energy through 2022.
CWEN (the public parent of Clean Energy Group) declared it will co-invest in nearly 1,204 megawatt (MW) of renewable projects, which are being manufactured by
Clearway Energy Group. The renewable projects include 1,012 MW from five wind, solar, and solar and storage assets under development, alongside the 192-MW Rosamond Central solar job expected to start operations at the end of the year.
Clearway amended the existing partnership arrangement for the 419-MW Mesquite Star wind project with Clearway Energy Group. The deal will offer Clearway an additional 27.5 percent of the project’s cash flows after the first-half 2031.
“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,”
Hannon Armstrong Chairman and CEO, Jeffrey W. Eckel.
Benefits From Investment
Clearway is expected to invest $214 million by 2022-end for enjoying the benefits from the diverse renewable projects. On Dec 21, 2020, the company acquired a 50% cash equity interest in
192-MW Rosamond Central solar project for $23 million.
Nearly 90% of generation in renewable projects is already being contracted from a diverse set of consumers, and the portfolio includes a greater than 14-year blended average contract duration. This will ensure steady earnings and increase cash flow production for Clearway over the long-term period.
Long-Term Plans
Clearway has a long-term aim of expanding operations through the purchase of production resources from third parties. The business believes that its knowledge of the marketplace and operating expertise will provide it with a competitive advantage and increase cash flow.
Clearway has already acquired 80 MW of solar jobs from Clearway Energy Group under the Right to First Offer manner. It arranged to acquire two wind projects with a combined capacity of 199 MWout. The Rattlesnake project will start operation from 2020, and Pinnacle Wind Repowering will kick start from 2021.
“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.”
Craig Cornelius, Chief Executive Officer at Clearway Energy Group, LLC.
Additional Details
The portfolio will include:
1012 MW from five geographically diversified wind, solar, and solar and storage assets under development the 192 MW Rosamond Central solar project is expected to commence operations by the end of 2020.
Additionally, the parties amended the existing partnership agreement to the 419 MW Mesquite Star end project, supplying CWEN an extra 27.51percent of the project’s cash flows after 1H2031.
Approximately 90 percent of the generation in the projects are contracted using a varied group of mostly investment-grade counterparties, including utilities and load-serving entities, Fortune 500 corporations, commercial and industrial clients, and financial institutions. The portfolio includes a greater than 14-year blended average contract length. Subject to final adjustments and the jobs achieving certain milestones, CWEN expects to invest roughly US$214 million in corporate funds by the end of 2022.
Dependent on the currently anticipated timing of these projects attaining cash on delivery, CWEN anticipates — before corporate funding costs — the advantage money available for distribution contribution from the investments to become immaterial in 2021, approximately US$9 million in 2022, and US$20 million on a five-year average basis starting on Jan 1, 2023.
Under the portfolio partnership arrangements, CWEN will act as managing member. The remaining interest in the equity partnerships will be possessed by Hannon Armstrong Sustainable Infrastructure Capital, Inc., an investor in climate solutions.
On Dec 21, 2020, CWEN gained its 50% equity interest in Rosamond Central for US$23 million and completed the amendment for the interest in Mesquite Star. The Mesquite Sky wind farm in Texas, US, and the Black Rock wind farm in West Virginia, US, will begin building in the coming weeks.
Definitive agreements regarding the Daggett, Waiawa, and Mililani jobs, also situated in the US, stay subject to certain conditions and the review and approval from CWEN’s Independent Directors.
CEG will serve as the long-term site operator and asset manager, ensuring continuity of performance and community involvement within each project’s life span.
