Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI): Business Model Canvas [11-2024 Updated]

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) is a pioneering force in the realm of sustainable investments, uniquely positioned to capitalize on the growing demand for climate-focused solutions. With a robust portfolio of over $13 billion in managed assets, HASI leverages strong partnerships with renewable energy companies, institutional investors, and government entities to create a diverse range of investment opportunities. This blog post delves into the Business Model Canvas of HASI, exploring its key components from partnerships and activities to revenue streams and customer segments, revealing how it drives both financial returns and environmental impact.

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Key Partnerships

Collaborates with renewable energy companies

Hannon Armstrong engages in partnerships with various renewable energy companies to enhance its project portfolio. As of September 30, 2024, the company managed approximately $6.3 billion in equity method investments, primarily in climate solutions projects operated by these partners. The company’s investments are often secured by installed improvements or real estate rights associated with renewable energy projects.

Engages with energy service companies (ESCOs)

HASI works closely with energy service companies to finance energy efficiency projects. This collaboration typically involves using pre-existing master purchase agreements, which help in assigning payment streams from project savings. As of September 30, 2024, HASI reported a significant portion of its securitized assets are backed by receivables related to contracts with ESCOs.

Partners with institutional investors for project funding

The company has established relationships with institutional investors to secure funding for its projects. As of September 30, 2024, Hannon Armstrong managed approximately $6.8 billion in assets through securitization trusts not consolidated on its balance sheet, which indicates a robust network of institutional partnerships.

Strategic alliance with KKR for climate solutions investments

In May 2024, Hannon Armstrong entered into a strategic partnership with KKR, committing to invest $1 billion each into climate solutions projects. This collaboration aims to leverage both companies' resources and expertise in advancing sustainable infrastructure.

Works with government entities for regulatory compliance

HASI collaborates with various government entities to ensure compliance with regulatory frameworks. This partnership is crucial for navigating the complex landscape of renewable energy regulations and securing necessary permits for projects. The company has been actively involved in projects where government entities are the ultimate obligors for receivables.

Partnership Type	Details	Financial Impact
Renewable Energy Companies	Managed $6.3 billion in equity investments as of September 30, 2024.	Strong portfolio diversification.
ESCOs	Utilizing master purchase agreements for energy efficiency projects.	Enhanced cash flow from project savings.
Institutional Investors	Managed $6.8 billion in securitized assets through trusts.	Access to significant capital for project funding.
KKR Alliance	$1 billion commitment to climate solutions projects.	Increased investment capacity and project reach.
Government Entities	Collaboration for compliance and permit acquisition.	Facilitated project development timelines.

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Key Activities

Identifies and underwrites climate-focused investments

As of September 30, 2024, Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) reported a robust pipeline of potential new investment opportunities amounting to over $5.5 billion. This pipeline is comprised of projects that align with HASI's investment strategy, focusing on climate solutions across various sectors.

Manages a diverse portfolio of sustainable assets

HASI's portfolio, as of September 30, 2024, totals approximately $6.3 billion, which includes around 520 assets. The portfolio is structured to promote diversity across project type, technology, geography, and maturity. The company also manages an additional $6.8 billion in assets through securitization trusts, bringing its total managed assets to approximately $13 billion.

Asset Type	Value (in millions)	Percentage of Portfolio
Equity Method Investments	3,353	53%
Receivables	2,900	46%
Real Estate	3	0.05%

Facilitates project financing through securitization

HASI actively engages in securitization to optimize project financing. As of September 30, 2024, the company held approximately $258 million in securitization assets, which are designed to enhance liquidity and facilitate the financing of climate-focused projects.

Conducts active asset management and portfolio monitoring

HASI conducts regular assessments of its asset performance, focusing on metrics such as the average annual realized loss on managed assets, which stands at 0.07% as of September 30, 2024. This meticulous monitoring helps in maintaining the quality and performance of the portfolio.

Engages in risk assessment and mitigation strategies

The company employs a comprehensive risk management framework to evaluate and mitigate potential risks associated with its investments. This framework includes qualitative and quantitative assessments of market conditions, credit quality, and regulatory impacts. In addition, HASI's average annual recognized loss on managed assets is reported at 0.12%, reflecting its robust risk management practices.

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Key Resources

$13 billion in managed assets

As of September 30, 2024, Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) reported approximately $13.1 billion in managed assets, a notable increase from $12.3 billion as of December 31, 2023. This portfolio includes various asset classes, such as equity method investments, receivables, real estate, and investments on the balance sheet. The breakdown of these managed assets is as follows:

Asset Type	Value (in millions)
Equity Method Investments	$3,353
Receivables (net of allowance)	$2,900
Real Estate	$3
Securitization Assets	$258
Other Assets	$75
Total	$6,672

Strong industry relationships and expertise

HASI benefits from long-standing relationships with leading clean energy project developers, utilities, and energy service companies (ESCOs). This network facilitates access to recurring investment opportunities and enhances the company’s ability to evaluate and execute climate solutions projects effectively.

Access to various financing sources

The company has a robust financing strategy, utilizing a mix of non-recourse and recourse debt, equity issuances, and off-balance sheet securitization structures. As of September 30, 2024, HASI had approximately $1.3 billion in available liquidity, which includes:

Liquidity Source	Amount (in millions)
Unrestricted Cash	$44
Unused Capacity (Unsecured Revolving Credit Facility)	$1,126
Unused Capacity (Commercial Paper Program)	$107
Unused Capacity (Senior Secured Credit Facility)	$22
Total Liquidity	$1,299

Proprietary risk management frameworks

HASI employs proprietary risk management frameworks to assess and mitigate risks associated with its investments. This includes evaluating project performance, credit quality, and market conditions, which allows the company to maintain a historically low average annual realized loss on managed assets of 0.07% as of September 30, 2024.

Advanced portfolio monitoring systems

The company leverages advanced portfolio monitoring systems to track the performance of its investments across various metrics. This includes a focus on environmental impact, where HASI estimates that its investments will avoid approximately 70,000 metric tons of carbon emissions annually. The monitoring systems help ensure that HASI can adapt its strategies in response to changing market dynamics and project outcomes.

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Value Propositions

Offers sustainable investment opportunities

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) specializes in providing financing for sustainable infrastructure projects. As of September 30, 2024, HASI managed approximately $13 billion in assets, focusing on investments that promote energy efficiency and renewable energy. The company’s portfolio consists of around 520 assets, emphasizing diversity across project types and technologies.

Provides attractive returns aligned with climate goals

HASI targets a portfolio yield of approximately 8.1% as of September 30, 2024, up from 7.9% at the end of 2023. For the nine months ended September 30, 2024, HASI reported a net income of $132.3 million, a significant increase from $59.8 million in the same period of 2023. This performance aligns with the growing demand for investments that not only yield financial returns but also contribute positively to climate objectives.

Reduces carbon emissions through innovative projects

HASI’s investments are designed to reduce greenhouse gas emissions, with a focus on projects that have scientifically linked carbon dioxide equivalents. The company’s CarbonCount metric is utilized to measure the carbon emissions avoided through its projects, helping to support its commitment to sustainability.

Delivers long-term financial and environmental benefits

The firm’s strategy includes long-term investments in energy efficiency and renewable energy, generating both financial returns and environmental benefits. For instance, interest income from receivables reached approximately $195.5 million for the nine months ended September 30, 2024, reflecting an increase of 34% from the previous year. This indicates a solid financial foundation that supports ongoing investments in sustainable projects.

Enhances energy efficiency for clients

HASI plays a crucial role in enhancing energy efficiency for its clients, providing financing solutions that enable the implementation of energy-saving technologies. The company’s financing efforts have led to significant energy savings and reduced operational costs for its partners, thereby creating value through both economic and environmental improvements.

Financial Metrics	Q3 2024	Q3 2023	Change (%)
Net Income (in millions)	$132.3	$59.8	121%
Portfolio Yield (%)	8.1%	7.9%	2.53%
Interest Income (in millions)	$195.5	$145.6	34%
Total Managed Assets (in billions)	$13.0	$13.0	0%
Number of Assets in Portfolio	520	520	0%

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Customer Relationships

Maintains ongoing communication with project stakeholders

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) prioritizes maintaining continuous communication with its stakeholders throughout the lifecycle of its projects. This includes regular updates and consultations with investors, project managers, and community representatives. The company manages approximately $13 billion in assets, reflecting its commitment to transparency and engagement with stakeholders.

Builds trust through transparent financial reporting

HASI emphasizes transparency in its financial reporting as a cornerstone of its customer relationships. For the nine months ended September 30, 2024, the company reported total revenue of $282.3 million, a 21% increase from $233.3 million in the same period of 2023. This growth is attributed to a significant increase in interest income, which rose to $195.5 million from $145.6 million, demonstrating the company's robust financial health and commitment to clear communication with its stakeholders.

Engages clients in collaborative investment processes

HASI actively engages its clients in collaborative investment processes, ensuring alignment with their sustainability goals. The company structures its investments through partnerships and joint ventures, allowing clients to participate in decision-making. As of September 30, 2024, HASI's portfolio included approximately 520 assets, underscoring its collaborative approach to project development and investment.

Provides tailored investment solutions based on needs

The company offers customized investment solutions tailored to meet the specific needs of its clients. This is evidenced by its diverse portfolio, which includes equity method investments, debt securities, and real estate holdings. As of September 30, 2024, HASI's managed assets totaled $13.1 billion, with a focus on climate solutions that align with clients' sustainability objectives.

Offers post-investment support and monitoring

HASI provides comprehensive post-investment support and monitoring to ensure the success of its projects. This includes ongoing performance assessments and adjustments based on client feedback and project outcomes. The company reported a net income of $132.3 million for the nine months ended September 30, 2024, reflecting its effective management of investments and commitment to supporting clients post-investment.

Metric	Q3 2024 Amount	Q3 2023 Amount	% Change
Total Revenue	$282.3 million	$233.3 million	21%
Interest Income	$195.5 million	$145.6 million	34%
Net Income	$132.3 million	$59.8 million	121%
Managed Assets	$13.1 billion	$12.3 billion	6.5%

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Channels

Direct outreach to potential project developers

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) actively engages with project developers through direct outreach initiatives. This strategy aims to identify and secure partnerships for climate solutions projects, thereby enhancing the company’s portfolio. As of September 30, 2024, HASI reported approximately $6.3 billion in transactions held on its balance sheet, with a portfolio consisting of around 520 assets.

Online platforms for investor engagement

HASI utilizes online platforms to facilitate investor engagement, showcasing its investment opportunities and performance metrics. The company’s common stock is listed on the New York Stock Exchange (NYSE) under the symbol 'HASI,' providing a transparent avenue for investors to track share performance and financial health. As of September 30, 2024, HASI's market capitalization was approximately $2.9 billion.

Institutional investor networks for capital raising

HASI has established strong relationships with institutional investor networks to raise capital effectively. During the nine months ended September 30, 2024, the company issued $700 million in senior unsecured notes due 2034 at a yield to maturity of 6.476%. The total liquidity available to HASI as of September 30, 2024, was approximately $1.3 billion, which includes unrestricted cash and unused credit facilities.

Participation in industry conferences and forums

HASI participates in various industry conferences and forums to enhance its visibility and network within the renewable energy sector. This engagement enables the company to stay informed on market trends and establish partnerships. The company’s transactions during the three and nine months ended September 30, 2024, amounted to approximately $396 million and $1.2 billion, respectively.

Utilization of financial intermediaries for project financing

HASI employs financial intermediaries to facilitate project financing, leveraging their expertise to optimize capital structure. As of September 30, 2024, HASI managed around $6.8 billion in assets within securitization trusts, alongside its portfolio. The company’s financial strategy includes various debt instruments, with total liabilities reported at approximately $4.35 billion.

Channel	Description	Financial Metrics
Direct Outreach	Engagement with project developers to secure partnerships.	Portfolio of $6.3 billion; 520 assets as of Sept 30, 2024
Online Platforms	Investor engagement through NYSE listing.	Market cap of $2.9 billion as of Sept 30, 2024
Institutional Networks	Capital raising through established investor relationships.	$700 million raised from senior unsecured notes
Industry Conferences	Participation in forums to enhance visibility and networking.	$396 million and $1.2 billion in transactions in Q3 and YTD 2024
Financial Intermediaries	Utilization of intermediaries for project financing.	Total liabilities of $4.35 billion as of Sept 30, 2024

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Customer Segments

Institutional investors seeking sustainable investments

As of September 30, 2024, Hannon Armstrong manages approximately $13.1 billion in total assets, with $6.8 billion of these being securitized assets held in non-consolidated trusts. Institutional investors are increasingly focused on Environmental, Social, and Governance (ESG) criteria, driving demand for sustainable investment options. The company has positioned itself to meet this demand, providing investment opportunities in climate solutions projects.

Government agencies focused on climate initiatives

Government agencies are key customers for HASI, particularly those involved in climate initiatives. As of September 30, 2024, HASI's portfolio includes contracts with federal, state, and local government entities, generating approximately $122 million in cash flows from receivables secured by energy efficiency technologies. Moreover, the company’s equity investments in climate solutions projects are often backed by government support and incentives, enhancing the viability of these projects.

Renewable energy project developers

HASI collaborates with renewable energy project developers, providing financing through equity and debt investments. As of September 30, 2024, the company reported approximately $6.3 billion of equity method investments and related receivables. This collaboration facilitates the development of renewable energy projects, with HASI often taking a preferred or mezzanine position in financing structures, ensuring a priority claim on project cash flows.

Corporations aiming to enhance sustainability efforts

Corporations seeking to improve their sustainability profile represent a significant customer segment for HASI. The company’s financing solutions help these corporations invest in energy-efficient technologies and renewable energy projects. As of September 30, 2024, HASI's investments are estimated to avoid approximately 70,000 metric tons of carbon emissions annually. Corporations benefit from HASI's expertise in structuring sustainable finance deals, which can enhance their corporate social responsibility (CSR) initiatives.

Non-profit organizations involved in environmental causes

Non-profit organizations focused on environmental causes are also part of HASI's customer segments. These organizations often require financial support for projects that align with their mission to promote sustainability. HASI’s strategic partnerships and investments in climate solutions projects allow non-profits to leverage financial resources effectively. The company has made significant contributions to projects that cumulatively avoid over 7 million metric tons of carbon emissions since 2013.

Customer Segment	Key Financial Metrics	Investment Focus
Institutional Investors	Managed Assets: $13.1 billion	Sustainable investment options
Government Agencies	Receivables Cash Flow: $122 million	Energy efficiency technologies
Renewable Energy Developers	Equity Investments: $6.3 billion	Renewable energy projects
Corporations	Carbon Emissions Avoided: 70,000 metric tons annually	Energy-efficient technologies
Non-profit Organizations	Carbon Emissions Avoided: 7 million metric tons since 2013	Environmental sustainability projects

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Cost Structure

Operational costs for asset management and monitoring

As of September 30, 2024, Hannon Armstrong reported total operational expenses of approximately $262.6 million, which include costs related to asset management and monitoring. Specifically, the general and administrative expenses accounted for about $24 million during the nine months ended September 30, 2024.

Financing costs associated with debt and equity

Hannon Armstrong's interest expense for the nine months ended September 30, 2024, totaled approximately $180.8 million, reflecting a significant year-over-year increase of $60.4 million, primarily due to a larger average outstanding debt balance and higher interest rates. The company’s total debt stood at approximately $4.1 billion as of September 30, 2024. Financing costs related to convertible notes amounted to approximately $19 million for the same period.

Marketing and outreach expenses

While specific figures for marketing and outreach expenses are not separately disclosed, these costs are generally included within the general and administrative expenses. The total general and administrative expenses for the nine months ended September 30, 2024, were reported at $24 million.

Legal and compliance costs related to partnerships

Legal and compliance costs are typically embedded within general and administrative expenses. Although exact figures for these costs are not provided, they are part of the overall operational costs, which totaled approximately $262.6 million.

Research and development for new investment opportunities

Research and development expenses, while not explicitly detailed, are likely included in the overall operational costs. Hannon Armstrong’s strategic focus on climate solutions and sustainable infrastructure suggests that investment in R&D is a priority, although specific allocations are not quantified in the financial reports.

Cost Category	Amount (in millions)
Operational Expenses (Total)	262.6
General and Administrative Expenses	24.0
Interest Expense	180.8
Convertible Notes Interest Expense	19.0
Total Debt	4,131.0

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - Business Model: Revenue Streams

Net investment income from portfolio assets

As of September 30, 2024, Hannon Armstrong reported interest income of $195.5 million, up from $145.6 million in the same period of 2023, marking a 34% increase .

Fees from asset management and servicing

In the nine months ended September 30, 2024, Hannon Armstrong earned $62.1 million from gains on the sale of assets, which reflects a 17% increase compared to $52.9 million in the previous year .

Gains from securitization transactions

During the same period, income from securitization transactions amounted to $19.2 million, a significant increase of 43% from $13.4 million in 2023 .

Income from joint ventures and partnerships

Hannon Armstrong's income from equity method investments saw substantial growth, generating $162 million in the nine months ended September 30, 2024, compared to $27.4 million in the same period in 2023, indicating a remarkable 491% increase .

Recurring income from residual ownership interests

In the nine months ended September 30, 2024, the company reported other income of $3.5 million, up from $2.4 million in the previous year, representing a 47% increase .

Revenue Stream	Q3 2024 Revenue (in millions)	Q3 2023 Revenue (in millions)	Change (%)
Net Investment Income	$195.5	$145.6	34%
Fees from Asset Management	$62.1	$52.9	17%
Gains from Securitization	$19.2	$13.4	43%
Income from Joint Ventures	$162.0	$27.4	491%
Recurring Income from Residual Interests	$3.5	$2.4	47%

Updated on 16 Nov 2024

Resources:

1. Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.