Subsequent Event |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Subsequent Events [Abstract] | |
| Subsequent Event | Subsequent Event On May 4, 2024, we, through our indirect subsidiary, HASI CarbonCount Holdings 1, LLC (“HASI CarbonCount”), a Delaware limited liability company, and Hoops Midco, LLC (“KKR Hoops”), an investment vehicle established as a Delaware limited liability company and managed by an affiliate of Kohlberg Kravis Roberts & Co. L.P. (“KKR”), entered into agreements to acquire interests in CarbonCount Holdings 1 LLC (“CCH1”), established to invest in certain eligible climate positive projects across the United States, as further described below.
CCH1 has been formed as a Delaware limited liability company. Upon the closing, HASI CarbonCount and KKR Hoops will each commit $1 billion to CCH1, to be invested in clean energy assets during an 18 month investment period. In addition, HASI, through its indirect subsidiaries, Hannon Armstrong Securities, LLC (the “Broker-Dealer”) and CarbonCount Holdings Manager LLC (the “Asset Manager”, and, together with the Broker-Dealer, the “Service Providers”), will be engaged by CCH1 pursuant to a services agreement (the “Services Agreement’) to provide certain services to CCH1.
CCH1 will be governed by a board of directors (“the Board”) which will initially be composed of four directors, two of which will be appointed by us and two of which will be appointed by KKR Hoops. Actions of the Board generally require the affirmative vote of at least three out of four directors. The Board will, pursuant to the Services Agreement, delegate to the Service Providers certain rights and powers to manage the day-to-day business and affairs of CCH1 with control over the significant decision making of CCH1 remaining with the Board.
The Broker-Dealer will source investment opportunities for CCH1 pursuant to the terms of the Services Agreement. Through the Broker-Dealer, HASI will be obligated to present all of the investment opportunities it identifies that fit within certain predetermined criteria to the Board until either Member’s commitment has been fully invested or upon the date that the 18-month investment period described above expires or is earlier terminated. The predetermined criteria within the Services Agreement does not alter our planned pipeline and includes investment opportunities that we would typically have originated on our balance sheet.
CCH1 will pay the Broker-Dealer, for provision of the services provided by it, an upfront fee on each funding of investments generally equal to 1% of the total cash consideration funded by CCH1 to the applicable investment counterparty. CCH1 will also pay the Asset Manager, for provision of the services provided by it, ongoing fees in respect of asset management and administering the management and operation of CCH1, payable when deducted from CCH1’s cash available for distribution. The fee payable to the Asset Manager will be calculated on the basis of certain performance thresholds and will generally not be less than 0.5% of invested capital per annum, subject to certain limited exceptions nor more than 1.00%.
At inception, we seeded CCH1 with equity method investments and receivables which were previously on balance sheet at a combined book value of $108 million as of March 31, 2024, and which are expected to have a total invested amount of $191 million once fully funded. We expect to receive approximately $55 million from KKR for the purchase of their share of the seeded assets on or before May 17, 2024.
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