Benzinga | Dec 22, 2020 04:25PM EST

Hannon Armstrong, Clearway Report Deals For 1.6GW Portfolio Of Renewable Energy Assets

Clearway Energy, Inc. (NYSE:CWEN, CWEN.A))) ("CWEN", "Company") and its renewable development partner and parent company, Clearway Energy Group LLC ("CEG"), today announced agreements providing for CWEN's co-investment in a 1,204 MW portfolio of renewable energy projects developed by CEG consisting of i) 1,012 MW from five geographically diversified wind, solar, and solar plus storage assets under development and ii) the 192 MW Rosamond Central solar project which is expected to commence operations by the end of the year. Additionally, the parties amended the existing partnership agreement for the 419 MW Mesquite Star wind project providing CWEN an additional 27.51% of the project's cash flows after the first half of 2031.

Approximately 90% of the generation from the projects are contracted with a diverse group of primarily investment grade counterparties, including utilities and load serving entities, Fortune 500 corporations, commercial & industrial customers, and financial institutions, and the portfolio has a greater than 14-year blended average contract length. Subject to closing adjustments and the projects achieving certain milestones, CWEN expects to invest approximately $214 million in corporate capital by the end of 2022. Based on the current expected timing of the projects achieving COD, CWEN expects, before corporate financing costs, the asset CAFD contribution from the investments to be immaterial in 2021, approximately $9 million in 2022, and $20 million on a 5-year average basis beginning on January 1, 2023.

"Our commitment to invest in this portfolio of renewable energy and battery storage projects will add geographic and technological diversification at CWEN," said Christopher Sotos, Clearway Energy, Inc.'s President and Chief Executive Officer. "We are pleased to achieve this important milestone in collaboration with our development partner and look forward to working together on future accretive portfolio investments."

"We are thrilled to successfully complete our largest portfolio transaction to date with Clearway Energy, Inc.," said Craig Cornelius, Chief Executive Officer at Clearway Energy Group LLC. "This geographically diverse 1.6 GW 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 and low-cost power to hundreds of thousands of households and businesses across the United States. Today's agreement with our investment partners will be pivotal in our continued ability to provide clean energy at the scale of our country's demand while helping to deliver on investors' growing interest in climate change solutions."

The assets included in the portfolio are:

Asset Technology MW1 CWEN Cash State Target Financial Type Allocation %2 ClosingAdditional Interest in Wind 419 50% TX ClosedMesquite StarRosamond Central Solar 192 50% CA ClosedMesquite Sky Wind 345 50% TX 2H21Black Rock Wind 110 50% WV 2H21Waiawa Solar/ 36 50% HI 1H22 StorageMililani Solar/ 39 50% HI 1H22 StorageDaggett Solar Solar/ 482 25% CA 2H22 Storage

Under the portfolio partnership agreements, CWEN will act as managing member. The remaining interest in the cash equity partnerships will be owned by Hannon Armstrong Sustainable Infrastructure Capital, Inc. ("Hannon Armstrong") (NYSE:HASI), a leading investor in climate solutions.

On December 21, 2020, CWEN acquired its 50% cash equity interest in Rosamond Central for $23 million and completed the amendment for the additional interest in Mesquite Star. The Mesquite Sky wind farm in Texas and the Black Rock wind farm in West Virginia will commence construction in the coming weeks. Definitive agreements relating to the Daggett, Waiawa, and Mililani projects remain subject to certain conditions and the review and approval by CWEN's Independent Directors.

CEG will serve as the long-term site operator and asset manager, ensuring continuity of performance and community engagement over the life of each project.