A new insurance facility has been launched today which will offer insurance products to renewable energy projects in developing countries. The facility has been launched by this coalition of re/insurers and environmental organisations; Munich Re, RSA Insurance Group, CarbonRe, the Global Environment Facility and the United Nations Environment Programme. The global renewable energy insurance facility will operate via a website insurance4renewables and will offer standard cover options as well as fully tailored solutions.
Products available at launch include carbon counterparty credit insurance, carbon all risks insurance and weather protections. The weather products available are lack of sun insurance and wind insurance. These will provide protection for renewable energy project operators when their operations face a drop in production due to weather fluctuations, and so provide revenue smoothing. One of the facilities aims is to foster a cooperative environment where new products and solutions can be developed as well.
It’s important for developing countries that renewable energy projects can be run successfully and being able to hedge against unsuitable energy conditions is essential. The hope is that a facility like this will have the domain focus and knowledge to enable products to be produced and sold which will lower the risks of starting energy projects in developing countries and make alternative methods of risk financing more accessible.
You can read the full press release on the Munich Re website.