GCube launches political risk insurance
Renewable energy underwriter GCube has launched a Political Risk Insurance (PRI) offering as demand for political and credit coverage increases.
According to GCube, companies and lenders are calling for stronger safeguards for renewable energy investments, and consequently political risk insurance, among ongoing economic uncertainty and increasing regulations.
“As investment in developing countries has grown, so too has demand for PRI,” said Jatin Sharma, business development leader at GCube Underwriting. “In recent years volatile economic and political conditions in these markets have really highlighted the inherent risks to companies and lenders – think of the enormous impact of high-profile events in the Middle East and North Africa and expropriations in the Latin American mining sector.”
The new initiative will target developing markets in Latin America, Africa, Asia Pacific and Central Asia, where GCube says companies and lenders are widely recognised to be at heightened risk of losses arising from actions taken by host governments, including confiscation, expropriation, nationalisation and deprivation (CEND).
“As renewable energy takes off, particularly in the solar sector, in these complex political environments, traditional cover is no longer sufficient to fully safeguard assets and investments. Project delay, damage and cancellation caused by unforeseen political incident or regulatory complications needs to be taken into account and addressed accordingly,” said Sharma.
“By expanding our range of services, we hope to continue providing the most comprehensive coverage offering available to the renewable energy sector and focus on our Insureds needs holistically.”
The company says that coverage against a combination of risks including political violence, forced abandonment, currency inconvertibility, forced divestiture, selective discrimination and license or contract repudiation will increasingly become a must-have for those with renewable energy investments in the form of subsidiaries and joint ventures overseas.
GCube, which currently provides underwriting services for on- and offshore wind, PV and thermal solar, biomass, hydro and wave and tidal energies, is offering up to $50 million capacity on a single project.
