Hannon Armstrong Sustainable Infrastructure Capital LLC is an Americansustainableinvestment company. In 2013, the company became the first investment company to gopublic as a clean energyreal estate investment trust. As part of its environmentally sustainable investment approach, Hannon Armstrong provides capital to companies in energy efficiency, renewable energy, and other sustainable infrastructure markets. The company is headquartered in Annapolis, Maryland. As of December 31, 2019, the company completed approximately $1.3 billion in transactions during 2019, compared to approximately $1.2 billion during 2018. It held approximately $2.1 billion of transactions on its balance sheet portfolio. As of December 31, 2019, the company also managed approximately $4.1 billion in these trusts or vehicles that are not consolidated on its balance sheet. When combined with portfolio, the company manages approximately $6.2 billion of assets.
History
The company was founded in September 1981 as Eden Hannon Goodwin & Company, led by Greg Eden and Mike Hannon out of the firm's first headquarters in Alexandria, Virginia. In 1983, entrepreneur and former Naval aviator R. Jon Armstrong joined the company and brought Federal contracting experience to expand the firm's client offerings. The current President, Chairman, and CEO of the company, Jeff Eckel, joined Eden Hannon in 1985 as senior vice president in the new energyproject finance group. In 1987, the company made its first renewable energy transaction by refinancing the Solar Energy Generating Systems III plant, a 30-megawatt concentrating solar plant in California to provide capital to develop SEGS VII and VIII. That same year, the company also completed its first third-party financed energy efficiency asset for the U.S. government, pioneering the use of third-party capital for government energy efficiency projects with a 25-megawatt cogeneration plant at the Department of Energy facility. In 1989, after the departure of Greg Eden, the company was renamed Hannon Armstrong. In 2000, Jeff Eckel returned to Hannon Armstrong as CEO, having previously led Wärtsilä Power Development and EnergySource. That same year, the company moved its headquarters to Annapolis, Maryland. In 2010, the firm developed the 49.9 MegaWatt Hudson Ranch geothermal project in California. After 32 years of operating as a private firm, Hannon Armstrong became publicly traded and was listed on the New York Stock Exchange in April 2013. In December of the same year, the company had sold $100 million of asset-backed Sustainable Yield® Bonds with a yield of 2.79%. In 2015, working with the Alliance to Save Energy, Hannon Armstrong debuted the CarbonCount® metric. CarbonCount® is a scoring tool that evaluates investments in U.S.-based clean energy and sustainable infrastructure projects to determine how effectively they can be expected to reduce annual CO2 emissions per $1,000 of investment. The methodology was first used to quantify the reduction in greenhouse gas emissions of Hannon Armstrong's $118 million green bond offering completed in September 2015. In 2017, Hannon Armstrong became the first American company to join the Climate Disclosure Standards Board’s Task Force on Climate-related Financial Disclosures. By 2018, Hannon Armstrong was investing approximately $1 billion annually, with most of the funds going towards energy efficiency and renewables projects in the U.S. The company signed the ‘We Are Still In’ declaration in support of climate action to meet the Paris Climate Agreement, as well as being part of Climate Action 100+. In May 2019, Hannon Armstrong's CEO Jeff Eckel numbered among the 75 executives lobbyingCongress to adopt carbon-pricing policies. In June 2019, the company made its inaugural issuance of $350 million in corporate unsecured green bonds at 5.25%. and followed that in September 2019 with an additional $150 million issuance of unsecured notes at a yield to maturity of 4.13%. The notes meet the environmental eligibility criteria for green bonds as defined by the International Capital Market Association's Green Bond Principles. In April 2020, the company issued $400 Million of green bonds. Hannon Armstrong uses the net proceeds from these offering to acquire or refinance, in whole or in part, eligible green projects, which include assets that are neutral to negative on incremental carbon emissions.
Investment strategy
Hannon Armstrong is the first American public company with a business model concentrating on investing in projects that increase resilience to climate change and reduce carbon emissions. Currently, approximately 25% of the company's stock is owned by investors focused on sustainability. The company offers capital primarily to companies in the energy efficiency and renewable industries, focusing on three asset classes: behind-the-meter, grid-connected, and other sustainable infrastructure investments. The investments are made using various structures, including equity, government and commercial receivables or securities, and real estate, among others. It also generates ongoing fees through gain-on-sale securitization transactions, services and asset management.
