KKR, HASI Launch $2 Billion Sustainable Infrastructure Investment Venture – ESG Today

KKR, HASI Launch $2 Billion Sustainable Infrastructure Investment Venture – ESG Today

Alternative asset and private equity investor KKR and climate solutions and sustainable infrastructure investment firm Hannon Armstrong Sustainable Infrastructure Capital (HASI) announced today the launch of CarbonCount Holdings 1 LLC (CCH1), a new venture aimed at investing up to $2 billion in “climate positive” sustainable infrastructure projects over the next 18 months.

Under the new agreement, KKR and HASI have each committed up to $1 billion to the new venture to invest in clean energy assets, with HASI responsible for sourcing investments and managing CCH1. Investments will be consistent with HASI’s existing investment strategy, which includes a focus on behind-the-meter, grid-connected, renewable natural gas and transport projects.

Behind-the-meter projects include building or facility-specific distributed energy projects which reduce energy usage or cost, such as community solar, electric storage and energy efficiency projects, while grid-connected projects include renewables such as solar, solar-plus-storage, and onshore wind, and renewable natural gas and transport projects typically encompass RNG plants, and transportation fleet enhancement and decarbonization.

HASI will also have responsibility for measuring the avoided emissions of CCH1’s investments using its proprietary CarbonCount scoring tool. Developed by Hannon Armstrong in 2013, CarbonCount evaluates investments in U.S.-based renewable energy, energy efficiency, and climate resilience projects to determine the efficiency by which each dollar of invested capital reduces annual carbon dioxide equivalent (CO2e) emissions. HASI uses CarbonCount to track and report on the impact of all investments.

Jeffrey A. Lipson, President and Chief Executive Officer of HASI, said:

“Our strategic partnership with KKR perfectly aligns with our Climate Clients Assets strategy, enabling us to capitalize on our ambitious pipeline of opportunities and scale our business. We are excited to collaborate with the KKR team, who share our commitment to accelerating the energy transition and whose interest in the relationship serves as a testament to HASI’s history of success.”

The new partnership follows the identification by KKR in December of decarbonization, and the large scale “brown-to-green” transition of asset-heavy sectors in particular, as a key “mega-theme” driving investment opportunities. The firm made a series of climate-focused and sector decarbonization moves, including the launch in August 2023 of a global climate strategy team in its infrastructure unit, which the firm said marked an expansion on its focus on climate investing, and has recently announced several large-scale energy transition infrastructure-related investments.

KKR will fund its investment in the new partnership from its core infrastructure strategy. The firm has invested over $15 billion in renewable energy and climate-related investments through its infrastructure platform, and has been ranked by BloombergNEF as the 10th-largest owner of operating and under construction solar assets in the U.S.

Cecilio Velasco, Managing Director on KKR’s Infrastructure team, said:

“HASI has built an impressive portfolio of sustainable infrastructure projects through strategic partnerships and we believe their pipeline of future opportunities is highly complementary to KKR’s existing clean energy investing strategy. We look forward to working together to advance projects in the sustainable infrastructure space and accelerate the energy transition.”

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