Hội nghị công bố kết quả kinh doanh quý 3/2026 của HASI: Tăng trưởng đầu tư và tái khẳng định định hướng năm 2028

Điểm nhấn chính

• HASI công bố EPS điều chỉnh quý 3/2026 đạt 0,82 USD. Lũy kế 9 tháng đầu năm, EPS điều chỉnh tăng 15% so với cùng kỳ năm trước lên 2,34 USD, trong khi lợi nhuận điều chỉnh tăng 21% lên 309 triệu USD.
• Thu nhập đầu tư ròng định kỳ đã điều chỉnh tăng 23% so với cùng kỳ năm trước lên 330 triệu USD tính đến quý 3. Con số này bao gồm khoản lãi 35 triệu USD từ SunStrong, được bù đắp một phần bởi khoản chi phí 21 triệu USD liên quan đến tài sản RNG.
• Giá trị giao dịch hoàn tất từ đầu năm đến nay đạt 2,8 tỷ USD, bao gồm 2,5 tỷ USD dành cho bảng cân đối kế toán của HASI hoặc CCH1. Lợi suất đầu tư mới đạt bình quân hơn 11%.
• Tài sản quản lý tăng 26% so với cùng kỳ năm trước lên 19 tỷ USD, trong khi danh mục đầu tư của HASI vượt mốc 9 tỷ USD. Danh mục dự án tiềm năng vẫn duy trì trên 6,5 tỷ USD sau khi hoàn tất hơn 1 tỷ USD giao dịch trong quý 3.
• Ban lãnh đạo tái khẳng định mục tiêu EPS điều chỉnh năm 2028 từ 3,55 USD đến 3,65 USD và mục tiêu ROE điều chỉnh đạt ít nhất 17%. Công ty cũng kỳ vọng khối lượng giao dịch trên bảng cân đối kế toán và CCH1 năm 2026 sẽ tiệm cận mức cận trên của khoảng từ 2 tỷ USD đến 3 tỷ USD.
• HASI kết thúc quý 3 với 2 tỷ USD thanh khoản và hệ số đòn bẩy nợ trên vốn chủ sở hữu điều chỉnh là 1,8 lần, nằm trong phạm vi mục tiêu từ 1,5 đến 2,0 lần.

Dữ liệu tài chính quan trọng

Kết quả kinh doanh và hoạt động

HASI đã hoàn tất hơn 1 tỷ USD giao dịch trong quý 3 và bổ sung danh mục dự án tiềm năng lên hơn 6,5 tỷ USD. Danh mục dự án tiềm năng tiếp tục được đa dạng hóa trên 3 thị trường mục tiêu lớn nhất của công ty và hơn 10 loại tài sản.

Một khoản đầu tư lớn trong quý 3 bao gồm 10 dự án điện mặt trời quy mô lớn, điện mặt trời kết hợp lưu trữ và điện gió do Invenergy phát triển. Danh mục này có tổng công suất 2,7 gigawatt tại 7 bang. Ban lãnh đạo cho biết khoản đầu tư bao gồm cổ phần phổ thông, mang lại tiềm năng sinh lời gia tăng, với IRR kỳ vọng phù hợp với các khoản đầu tư đấu nối lưới điện gần đây của HASI.

Lãi suất tiếp tục là tâm điểm chú ý. Lợi suất bình quân gia quyền từ đầu năm đến nay của các khoản đầu tư trên bảng cân đối kế toán đã vượt 11%, và lợi suất danh mục đầu tư tăng hơn 70 điểm cơ bản trong năm 2026. Ban lãnh đạo cho biết chi phí lãi vay chỉ tăng khiêm tốn do hầu hết nợ được tài trợ theo kỳ hạn. Hơn 90% dư nợ bình quân trong hai năm qua có lãi suất cố định hoặc đã được phòng ngừa rủi ro, trong khi các khoản phải thu lãi suất thả nổi chỉ chiếm khoảng 5% danh mục đầu tư.

SunStrong Management cung cấp dịch vụ cho hơn 5 gigawatt công suất điện mặt trời, hơn 160 hệ thống trạm sạc xe điện và khoảng 450.000 khách hàng sử dụng điện mặt trời. Hoạt động kinh doanh này có EBITDA dương, và HASI đã nâng giá trị ghi sổ của khoản đầu tư lên 41 triệu USD dựa trên tiến độ hoạt động và định giá của bên thứ ba độc lập.

CCH1 đã định giá 400 triệu USD trái phiếu khấu hao định kỳ kỳ hạn 20 năm đáo hạn vào năm 2046 với mức chênh lệch 195 điểm cơ bản. HASI cũng thay thế một khoản vay có bảo đảm có kỳ hạn bằng một hạn mức mới có biên độ SOFR thấp hơn 100 điểm cơ bản. Công ty không sử dụng chương trình ATM trong quý 3 và tiếp tục dự kiến lượng phát hành qua ATM trong năm 2026 sẽ ở mức tối thiểu.

Định hướng của ban lãnh đạo

Ban lãnh đạo tái khẳng định các mục tiêu sau:

• EPS điều chỉnh năm 2028 từ 3,55 USD đến 3,65 USD.
• ROE điều chỉnh năm 2028 đạt ít nhất 17%.
• Khối lượng giao dịch trên bảng cân đối kế toán và CCH1 năm 2026 đạt từ 2 tỷ USD đến 3 tỷ USD, với kết quả dự kiến tiệm cận mức cận trên của phạm vi này.
• Lãi từ bán tài sản năm 2026 đạt từ 50 triệu USD đến 60 triệu USD.
• Tăng trưởng EPS điều chỉnh năm 2026 phù hợp với mục tiêu tăng trưởng 10% trong dài hạn của công ty.

Ban lãnh đạo cho biết triển vọng kinh doanh của công ty không thay đổi sau kết quả bầu cử. Công ty tiếp tục kỳ vọng hoạt động đầu tư, lợi suất tài sản, thu nhập từ phí và hiệu quả sử dụng vốn sẽ hỗ trợ cho các mục tiêu dài hạn hơn.

Rủi ro và các yếu tố cần theo dõi

HASI đã ghi nhận khoản chi phí 21 triệu USD cho một dự án RNG bị ảnh hưởng bởi sự cố thiết bị. Công ty đang thay thế thiết bị và dự kiến nhà máy sẽ bắt đầu vận hành trong nửa đầu năm 2027, với khả năng thoái vốn trước cuối năm 2027. Kịch bản cơ sở của ban lãnh đạo vẫn là thu hồi toàn bộ vốn đầu tư, song thừa nhận rằng kết quả này vẫn tiềm ẩn rủi ro.

Khoản đầu tư RNG đã được chuyển sang Danh mục 3, chiếm khoảng 1% danh mục đầu tư, do những thách thức về việc hoàn thành xây dựng và tính không chắc chắn trong việc thu hồi vốn.

Hoạt động hoàn tất giao dịch có thể không đồng đều giữa các quý. Ban lãnh đạo kỳ vọng danh mục dự án tiềm năng trong quý 4 sẽ vững chắc nhưng lưu ý rằng các giao dịch có thể chuyển sang quý 1/2027 mà không làm thay đổi triển vọng chung.

Vay ngắn hạn tăng vào cuối quý phản ánh thời điểm sử dụng thương phiếu. Chiến lược đã nêu của HASI là ban đầu tài trợ cho các giao dịch bằng vốn vay ngắn hạn và sau đó tái cấp vốn bằng trái phiếu không có bảo đảm dài hạn hơn.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

• Cấu trúc CCH2: Ban lãnh đạo kỳ vọng CCH2 sẽ ra mắt vào đầu năm 2027 và đang thảo luận về việc tham gia với các bên ngoài KKR. Cấu trúc này dự kiến sẽ tương tự CCH1, nhưng tỷ lệ sở hữu của HASI có thể dưới mức 50% nắm giữ trong CCH1, giúp nâng cao hiệu quả bảng cân đối kế toán.
• Mức độ tiếp xúc với trung tâm dữ liệu: HASI không có mức độ tiếp xúc trực tiếp nào với trung tâm dữ liệu. Ban lãnh đạo cho biết các trung tâm dữ liệu đóng góp vào nhu cầu điện năng hỗ trợ phát triển năng lượng tái tạo và hiện không kỳ vọng triển vọng nhu cầu đó sẽ thay đổi.
• Cơ cấu danh mục dự án tiềm năng: Tỷ trọng dự án đấu nối lưới điện giảm chủ yếu do HASI đã hoàn tất giao dịch lớn với Invenergy. Ban lãnh đạo cho biết danh mục dự án đấu nối lưới điện nền tảng vẫn mạnh mẽ, trong khi các cơ hội về dự án sau công tơ cùng nhiên liệu, giao thông và các lĩnh vực liên quan đến tự nhiên đều mở rộng.
• Các loại tài sản mới: HASI đang đánh giá hạ tầng nước, nông nghiệp bền vững và loại bỏ carbon. Ban lãnh đạo cho biết công ty thường bắt đầu với các khoản đầu tư nhỏ hơn, theo dõi hiệu quả hoạt động và áp dụng kinh nghiệm thu được trước khi mở rộng sang một thị trường mới.
• Chiến lược về nước: Công ty vẫn đang trong giai đoạn đầu xây dựng chiến lược hạ tầng nước rộng hơn. Ban lãnh đạo nhận thấy thêm nhiều cơ hội nhưng chưa xác định phạm vi chính xác cho hoạt động đầu tư trong tương lai.

Toàn văn biên bản cuộc gọi công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Greetings and welcome to the HASI Third Quarter 2026 Earnings Conference Call and Webcast.

[Operator Instructions]

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Aaron Chew, Senior Vice President of Investor Relations.

Aaron Chew

Thank you, operator, and good afternoon to everyone joining us today for HASI's third quarter 2026 conference call. Earlier this afternoon, HASI distributed a press release reporting our third quarter 2026 results, a copy of which is available on our website along with the slide presentation we will be referring to today. This conference call is being webcast live on the Investor Relations section of our website, where a replay will be available later today.

Some of the comments made in this call are forward-looking statements which are subject to risks and uncertainties described in the Risk Factors section of the company's Form 10-K and other filings with the SEC. Actual results may differ materially from those stated. Today's discussion also includes some non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is available in our earnings release and presentation.

Joining us on the call today are Jeff Lipson, the company's President and CEO, as well as Chuck Melko, our Chief Financial Officer. Also available for Q&A is Susan Nickey, our Chief Client Officer. To kick things off, I will turn it over to our President and CEO, Jeff Lipson, who will begin on Slide 3. Jeff?

Jeffrey Lipson

Thank you, Aaron, and welcome to our third quarter 2026 earnings call. I am pleased to report that HASI has delivered another solid quarterly report, underpinned by robust investment activity, strong asset yields, healthy investment margins, and continued growth in fee income. Our strategy of partnering with clients, providing capital to climate-positive projects, continues to prove resilient. Adjusted earnings per share in the quarter was $0.82, enhanced by a fair value adjustment of our SunStrong Management affiliate, and on a year-to-date basis, our adjusted earnings per share has grown 15% versus 2025. Adjusted return on equity is 15.6% year-to-date as our balance sheet management strategy continues to result in higher returns. Through the first 3 quarters of 2026, adjusted recurring net investment income has grown 23% year-over-year to $330 million, and managed assets have increased 26% year-over-year to $19 billion. Supported by our outlook for investment volumes and margins as well as fee income, we are reaffirming our guidance for adjusted EPS in a range of $3.55 to $3.65 and adjusted ROE of at least 17%, both in 2028.

To be clear, we have not changed our outlook for the business as a result of the election outcome. Turning to Slide 4, I want to address the increase in interest rates in 2026 and the impact on our business. 10-year Treasury yields exceeded 5% in the third quarter for the first time in almost 20 years. However, we continue to implement strategies that mitigate interest rate volatility and result in a more stable, predictable business. In fact, we closed more than $1 billion of transactions in the quarter, and the year-to-date weighted average yield for balance sheet investments is greater than 11%. Our portfolio yield is up over 70 basis points over the course of this year. On the funding side of the business, interest expense is up only modestly in 2026, as most of our debt is term debt, which is unimpacted by the current rate volatility, and our short-term funding costs actually declined year-over-year.

Whereas Slide 4 details the outcome of our interest rate risk management, Slide 5 details the tactics to achieve these outcomes. The single most important tactic that minimizes our interest rate sensitivity is that we issue long-term debt and make long-term investments with a targeted return in excess of these debt costs, locking in the spread for several years. Notably, investment-grade status has reduced both the spread and volatility of our debt costs. Secondly, we reduce any duration mismatch of our assets and liabilities with a hedging program that utilizes forward starting swaps and other derivatives to extend the duration of our liabilities. In addition, it is critical to note that we have structured our company with a focus on the IRR of our investments and the long-term cash flow of the business and not on moment-in-time measurements such as net asset value. And finally, I will also note that we generally minimize our floating-rate exposure, both on the asset and liability side of our balance sheet. On average, more than 90% of our debt has been fixed-rate or hedged over the last 2 years, and only around 5% of our investment portfolio is in floating-rate receivables.

Now turning to Slide 6, we examine the impact interest rates have on renewable energy project economics. There is often a perception that renewable energy is disproportionately exposed to interest rates relative to other sources of electricity. And while it's true the cost of renewables is naturally impacted by higher interest rates, particularly because the vast majority of lifetime costs of a renewable energy project is incurred upfront, this impact is not disproportional to other sources and does not change the calculation that renewables remain the least expensive and fastest to market source of power. This slide utilizes Lazard's Levelized Cost of Energy report to confirm these conclusions. And we at HASI are not seeing any reduction in activity from our clients related to renewables development and continue to observe higher PPA prices, reflecting continued strong demand.

Turning to Slide 7, we highlight a significant new investment we closed last quarter in a portfolio of projects developed by Invenergy. This investment includes 10 utility-scale solar, solar-plus-storage, and wind projects, totaling 2.7 gigawatts across 7 states. It represents a major expansion of our partnership with Invenergy that originally began more than 10 years ago, and we look forward to building on this partnership in the years ahead. We also note on this slide our substantial activity in grid-connected investments, particularly over the past 2 years, which reflects both the large volume of renewables development activity and HASI's strong presence as a leading capital partner.

Turning to Slide 8, even after closing more than $1 billion in new transactions, we successfully replenished our pipeline so that it remains greater than $6.5 billion as of quarter end. The pipeline also remains highly diversified across our 3 largest end markets and more than 10 asset classes. We also include an Other Sustainable Infrastructure category, which encompasses many of the new opportunities we are considering, similar to our recent announcements related to water infrastructure and enhanced rock weathering. There are also several trends noted on the slide, including a robust PPA market, expected growth in resi and community solar and storage, and continued development of RNG, all of which support ongoing pipeline growth.

Turning to Slide 9, I would like to provide an update and overview of our investment in SunStrong Management. As a reminder, SunStrong was a joint venture created by HASI and SunPower in 2018 for the purpose of owning and financing residential solar systems and leases. Following the SunPower bankruptcy, SunStrong was split into SunStrong Management, known as SSM, which is an operating company primarily providing servicing support for solar assets, and SunStrong Capital Holdings, which continues to own the solar systems and securitized cash flows. As you may recall, in the third quarter of 2025, we were able to generate a meaningful distribution from SunStrong Capital Holdings due to a prudent senior debt refinancing. In the third quarter of 2026, we were able to take a meaningful gain on the SSM investment for which we utilize fair value accounting treatment.

As we turn to Slide 10, we display the tremendous progress the SSM team has achieved in terms of assets under management, volume of customers, revenue, and profitability. As of the end of Q3, SSM services more than 5 gigawatts of solar energy capacity, more than 160 EV charging systems, and approximately 450,000 solar customers. Revenues exceeded $100 million in 2025 and have grown significantly in 2026, and the company is now EBITDA positive. Given all this progress and an independent third-party valuation, we are increasing the book value of our SSM investment to $41 million this quarter, and we believe SSM offers even greater potential for appreciation and income generation in the years ahead.

With that, I will ask Chuck to discuss our Q3 results in greater detail. Chuck?

Jeffrey Lipson

Thanks, Jeff. Before I get into our financials, I should highlight that we are realizing the expected benefits from putting in place the building blocks for a solid foundation of recurring earnings and equity capital efficiency that is allowing us to thrive in a backdrop of volatility in the capital markets. Now let us take a look at our key profitability metrics. For the first 9 months of the year, adjusted EPS has grown to $2.34. Adjusted earnings is up 21% to $309 million. Adjusted ROE increased from 13.4% to 15.6%. This performance is driven by the success we continue to see in our transaction closings, maintenance of investment margins, increased asset management fees, and equity capital efficiency.

As Jeff already mentioned, we're on track to deliver on all of our guidance metrics. Slide 12 provides the key components of our earnings growth. The largest contributor is our adjusted recurring net investment income, or ARNI for short, which has grown 23% year-over-year to $330 million through the first 3 quarters of 2026. Included in ARNI is a $35 million gain from SunStrong just discussed. This gain was offset in part by a $21 million charge we took in Q3 related to the RNG asset we consolidated in Q2. Work is underway and the equipment replacement is proceeding as planned, and we continue to expect the plant to come online in the first half of 2027, with a potential sale to be completed before the end of 2027. While it is still our baseline view that we will recover all of our invested capital, there is a risk to that view, and we believe it is appropriate for a reserve to be taken.

Gain on sale was $46 million through the first 9 months of the year, compared to $51 million in the same period last year. Based on what is currently in the pipeline for the remainder of the year, we expect gain on sale to be between $50 million and $60 million. But due to the growth in our ARNI, we still expect 2026 adjusted EPS to be in line with our long-term adjusted EPS growth target of 10%. Lastly, origination fees and other income was up almost 4x from the same period last year to $27 million, driven by both CCH1 origination fees as well as other one-time fees.

Slide 13 provides an overview of closed transactions for the first 9 months of the year. We have closed a total of $2.8 billion of transactions so far this year, $2.5 billion of which will be held on our balance sheet or at CCH1, a meaningful step up from our pace of investments over the prior 3 years. For our new balance sheet or CCH1 transactions, we are already at the midpoint of our target of $2 billion to $3 billion and expect to be at the higher end of the range for the full year. Our new investments continue to be diversified and the related yields are supportive in maintaining our margins and have been, on average, greater than 11% so far this year.

On Slide 14, we provide a summary of our base of earning assets. Managed assets have grown almost $3 billion for the year and have nearly doubled since 2022 to $19 billion. Our portfolio has grown 20% from the end of last year to more than $9 billion. Assets held at CCH1 have grown more than 230% from the same time last year to nearly $4 billion, where half of that is fee-generating assets. Discussions and work related to CCH2 are still progressing, and we remain optimistic on a smooth transition. On the diversification of our portfolio, you can clearly see that we continue to not be concentrated in any one particular asset class. And while we may have new investment concentrations in an individual quarter, our pace of closings eventually balances out the distribution of our investments and is a driver in the strong performance of our portfolio.

On Slide 15, we highlight our capital markets activity since our last call. CCH1 priced its third note offering in October, $400 million of 20-year fixed-rate amortizing notes due in 2046. The spreads were consistent with the prior issuance in May of this year at 195 basis points. This was achieved despite an increase in market spreads and volatility across fixed income markets at the time. In addition, we closed on a new secured term loan facility with a spread to SOFR that improved 100 basis points from a secured term loan it replaced.

On the equity capital front, we have had another quarter with no ATM usage to fund our growth, and we continue to expect minimal ATM share issuance in 2026. As mentioned before, future growth in our transaction opportunities may require equity issuance, but we will be more efficient with how much earnings are generated for each share of equity issued. We ended the quarter with $2 billion of liquidity and our adjusted leverage ratio was well within our 1.5 to 2x target at 1.8x debt to equity. Lastly, we end the quarter with a slightly higher mix of floating-rate debt to total debt. This largely reflects amounts outstanding on our commercial paper program. The higher short-term borrowing balance is timing related, as our funding strategy is to initially fund with short-term borrowing and refinance with longer-term unsecured notes.

Moving on to Slide 16, given the volatility in the credit markets, it is helpful to spend a few minutes on our credit spreads, which have narrowed considerably over the last few years, helping to offset the increase in base rates over the last few months. From our last issuance earlier this year in February, there has been a meaningful improvement in our credit spreads in secondary market trading relative to issuance. We previously issued a 10-year note with a spread of 195 basis points at pricing and is now trading 15 to 25 basis points lower on the spread. With the improvement in our spreads, as well as a positive outlook recently announced by Moody's, we are positioned for success on our next issuance. Additionally, as I mentioned earlier, we have a commercial paper program that has seen improvement in cost with an 80 basis point reduction over the past year.

I will now turn the call back to Jeff for his closing remarks.

Jeffrey Lipson

Thanks, Chuck. Turning to Slide 17, we display our sustainability and impact highlights. We noted HASI improved its S&P Corporate Sustainability Assessment, was named 1 of America's Greenest Companies for the 3rd year in a row by Newsweek, as well as a Low Carbon Leader by Morningstar Sustainalytics. As always, we also highlight our Carbon Count and Water Count figures for our investments year-to-date, in particular highlighting the 900 million gallon increase in water savings so far this year, driven in large part by our latest investment in wastewater treatment infrastructure we announced last quarter.

Wrapping up on Slide 18, we are reiterating our guidance for adjusted EPS, adjusted ROE, and payout ratio for 2028, as well as our guidance for transaction volume in 2026. The outlook for our business continues to be underpinned by a healthy pace of new investment activity in both our existing end markets as well as new opportunities. We also continue to achieve attractive asset yields, improvement in our debt spreads, an increasing level of fee income, and impactful capital efficiency. All of these positive outcomes are due to the hard work, dedication, and talent of our growing team that has been the key to our success. We look forward to a strong close to 2026 and starting off 2027 with great momentum.

Operator, please open the line for questions.

Operator

[Operator Instructions]

Your first question comes from Noah Kaye with Oppenheimer.

Phần hỏi đáp

Noah Kaye

Congratulations on the investments within Invenergy. I would love to get a bit more color on the nature of that. Is the structure pref equity or common? Does it vary across the different types of assets? And I assume it's at that sort of yield that you talked about for investment profile overall. But just a little bit more color would be helpful. Thank you.

Jeffrey Lipson

Thanks, Noah, for the question. In this case, this investment is common equity. It's an investment where we had a very strong sponsor, we had very strong contracts, we had equipment we're comfortable with, and there were several elements of the investment that made us comfortable being common. So in this case, we are common. As you point out, often we have preference, but in this case, we are common, we have more upside, and I would say our expected IRR is consistent with where we have been investing in grid-connected recently.

Noah Kaye

Excellent. And then, you know, this is sort of a victim of your success question, but indicating that the company is on track to reach near the high end of the targeted closed transactions, you're effectively already there, right? So understanding that timing can always be lumpy, is there anything that we should read into for the fourth quarter to make that a relatively low amount of activity, or is that just some conservatism on your part?

Jeffrey Lipson

Just for clarification, when you say we're almost there, what our guidance is for balance sheet. So for instance, on Page 13, that's the $2.5 billion number, not the $2.8 billion number that would be the number we're guiding towards. But yes, we are relatively close to the high end already. But I would not read anything into that. I think the fourth quarter pipeline still looks good. Yes, it's always difficult to predict timing of closings, but there's nothing to read into it around fourth quarter perhaps being slow anyway. You know we are expecting a good fourth quarter, but if things slip into the first quarter, that's not actually a big deal either. So no, I wouldn't read anything into that.

Noah Kaye

That's great. Maybe just one quick last one. It looks like CCH1, if I have the math right, added about 200 million net quarter-over-quarter. Please correct me if that's not the case, but just how to square that with the billion-plus of transactions closed in the quarter.

Jeffrey Lipson

Well, a couple of things. First of all, the billion closed does not necessarily mean funded. And the CCH number is the funded number in CCH. Another clarification is, I don't have the number right in front of me, but I do think funded balance in CCH did go up much more than $200 million in the quarter. I'm scrambling for that number now, but I think it's closer to a billion. Is that right, Chuck?

Jeffrey Lipson

Yes, a billion is the total increase in CCH1, and that's the number that's inclusive of KKR's funding portion, a little bit of debt funding, as well as our equity commitment funding.

Noah Kaye

Okay, thank you for clearing that up. I'll turn it over.

Jeffrey Lipson

Thanks, Noah.

Operator

Your next question comes from Ben Kallo with Baird.

Ben Kallo

Just maybe on CCH2, I know it's so early, but do you expect it's going to be still just KKR as a partner, or are you bringing other investors in that? I have a follow-up as well.

Jeffrey Lipson

Thanks for the question, Ben. We are talking to other parties as well. I think we mentioned that in our call, but nothing definitive to report yet. We remain very confident there will be a CCH2. At this point, it's likely to embark early next year, and it may have some other partners in addition to KKR.

Ben Kallo

Great. Thanks, Jeff. As you think about the pipeline, with the election and your worries around data centers, could you just talk about the exposure to data centers regionally or however you think best to explain it to us? Thank you.

Jeffrey Lipson

Sure. So, we don't have direct exposure to data centers. Of course, data centers do drive much of the demand for electricity that's driving much of the development that we see and invest in. We don't foresee that demand curve changing. I think the demand expectation from most of the consulting companies has not changed. And therefore, as a downstream impact to that, we don't envision development in renewables changing much from what we had expected prior to the election.

Operator

Your next question comes from Chris Dendrinos with RBC Capital Markets.

Christopher Dendrinos

Maybe to start, I'll follow up on Ben's question there in regards to CCH2 and you mentioned additional partners. Are there thoughts around changing the structure of, I guess, the overall funding? Right now with one it's 50-50, and maybe just how are you thinking about that commitment level and maybe flexing it down or up?

Jeffrey Lipson

Thanks for the question, Chris. I think from an overall structure point of view, CCH2 is unlikely to look much different from CCH1 in that the structure has worked particularly well. In terms of the other portion of your question, which is what percent of the vehicle will HASI own, I think that, again, will be derivative of how many parties participate in CCH2. And there may be more participants down the road, too. So whoever participates at closing may not be the full universe of those that participate. So HASI's percentage ownership may change over time. But yes, it could be lower than the 50% that we own in CCH1. And we do view that as an interesting balance sheet efficiency item.

Christopher Dendrinos

Got it. Thanks. And maybe just separately, I think it was a week or 2 ago, you all announced that you closed a transaction with Terradot for carbon removal. I think it's the 1st time you've done a partnership on the carbon capture vertical. So maybe just overall, how are you thinking about the size of that market opportunity? As you jump into these kind of newer asset classes, is it kind of a situation where you make 1 investment and step back and watch its performance for some time, or is there the opportunity to kind of have follow-ons to this going forward? Thanks.

Jeffrey Lipson

Sure. Good question. I think you touched on some of the ways in which we think about it. We generally wouldn't invest in an area where we didn't think there was scale. So carbon removal broadly is an area where we do think we may be able to become active over time. How much of that is specifically enhanced weathering remains to be seen, but I think carbon removal more broadly is very interesting to us. And then, yes, investing in small amounts, watching it, learning, using that knowledge to make further investments is typically how we have expanded into new markets. So I think that is consistent with the way we think about this investment. Thank you.

Operator

[Operator Instructions]

Your next question comes from Julien Dumoulin-Smith with Jefferies.

Julien Dumoulin-Smith

This is Anuhea Elliott on for Julian. I guess just to start out on portfolio performance, I noticed that about 1% of the portfolio is now classified as significantly below metrics compared with none in Q2. So I guess just can you discuss at a high level what drove that change and how are you thinking about the potential for maybe stabilization or improvement here?

Jeffrey Lipson

Yes, hi, this is Chuck. So the asset that had moved to what we call Category 3 of investments is the investment that we mentioned last quarter that we moved to Category 2, where there were some challenges with completing construction of the project. We took it on, we're consolidating it, and now we're working to manage it to complete the project and then ultimately sell it. So we think there is a little bit of risk here on getting our invested capital back, which we felt prudent to move it to Category 3 as a result.

Julien Dumoulin-Smith

Okay, got it. Makes sense. And then I guess just second, I noticed that the pipeline mix changed a lot this quarter. So I guess can you explain what drove that shift and what other kinds of projects you're now seeing as more interesting? I know we just touched on carbon capture, but just any more color there.

Jeffrey Lipson

Sure. I think the grid-connected as a percent of the pipeline shrank primarily because we closed the Invenergy deal. I would definitely not read anything into that. I think our grid-connected pipeline is as strong as ever, and we're continuing to build that pipeline further. As we showed on one of the slides, our grid-connected activity has been particularly strong in the last 2 years. It just so happened we just closed a large transaction, and then behind-the-meter and FTN pipelines grew, so proportionally it became smaller.

In terms of the second part of your question related to some of the Other Sustainable Infrastructure, again, I think last quarter we talked a little bit about water infrastructure. We talked a little bit about sustainable agriculture. Just a few moments ago, we talked about carbon removal. So I think those are some of the areas that would comprise that Other Sustainable Infrastructure slice of the pie.

Julien Dumoulin-Smith

Got it. Thank you.

Operator

Your next question comes from David Rold with Bank of America.

Unknown Speaker

Understanding that they're very different assets, I was wondering if you could just compare and contrast the situation with both, I guess, the RNG assets and the Category 3 project relative to the SunStrong situation at the time. I'm wondering how much the evolution of your company over the past couple years might expand with respect to remediation and, I guess, the extent to which SunStrong is a better case study for those situations.

Jeffrey Lipson

Thanks for the question. I think there's 0 relevance between the SunStrong investment and the RNG project. Again, 1 is a, as it relates specifically to SunStrong Management, an operating company in which we are an owner. I think I gave a little bit of the history and the company is performing very well, continuing to sign contracts to service additional portfolios and has a strong management team, and we're able to recognize a gain on that investment this quarter.

Completely separately, we had, as Chuck talked about, made an RNG investment in which there were some equipment problems and we foreclosed, and now we're fixing the equipment and going to sell the project. But those two things have absolutely nothing to do with each other. I think the 1 thing I would add here that is a consistent theme between the two that can be used in both cases, we did have to step in and help stabilize the operations to protect our investment. So, if there was 1 common thing here, that is the 1 that I would pull through on both.

Unknown Speaker

All right. Thank you very much.

Operator

[Operator Instructions]

Your next question comes from Ryan Pfingst with B. Riley Securities.

Ryan Pfingst

Just wanted to ask a follow-up on the opportunities in water, following the investment in the wastewater treatment infrastructure that you announced last quarter. What other kind of verticals within water are you looking at? Do the yields make sense relative to what you're earning in other markets? Just curious if we'll see more investments announced here in the coming quarters within water.

Jeffrey Lipson

Thanks, Ryan. I would say we are still in the very, very early innings of what our water strategy is going to be. We had this opportunity, we did a significant amount of research and diligence around that opportunity to understand the broader water infrastructure market, and this investment was very attractive to us. As it relates to follow-on investments, as I said earlier, we would not have done it if we didn't think there was additional opportunity, but by the same token, I don't think we have framed that opportunity precisely enough to articulate a water strategy just yet, but it's something we're spending a lot of time on and figuring out exactly how we want to attack that market.

Ryan Pfingst

Appreciate that, guys.

Operator

This concludes today's conference. Thank you for participating. You may now disconnect.

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