Reinsurance News

Nephila Climate and Allianz complete Proxy Revenue Swap for Australian wind farm

20th June 2018 - Author: Matt Sheehan

Nephila Climate (NCx), the weather and ESG-driven specialty division of Nephila Holdings, together with Allianz Global Corporate & Specialty’s alternative risk transfer unit, have completed a Proxy Revenue Swap and Corporate Power Purchase Agreement (PPA) for the Lal Lal wind farm project in Victoria, Australia.

wind farmThe Proxy Revenue Swap transaction marks the first of its kind for wind energy in Australia, and will ensure revenue certainty for the Lal Lal project, with NCx and Allianz assuming production volume, timing of energy generation, and future energy price risks.

Meanwhile, the second transaction will help Orara, a large consumer of electricity, lock in the cost of procuring baseload green energy from the new wind farm, without the production variability traditionally associated with PPAs.

The 228 MW Lal Lal project is owned by a partnership comprising Infrared Capital Partners, Macquarie Capital, and Northleaf Capital, and is expected to begin producing electricity in the third quarter of 2019.

Richard Oduntan, Chief Executive Officer (CEO) of Nephila Climate, said: “NCx is delighted to provide innovative solutions to another wind farm development while simultaneously helping a commercial and industrial consumer of electricity purchase green energy in the form that suits their needs.”

Karsten Berlage, Managing Director of Allianz, also commented: “We are excited to create and commercialize this new risk management tool for the Australian renewables industry following our successful provision of hedging solutions for investments in North America.”

The Proxy Revenue Swap product has now been transacted on more than one GW of renewable energy development projects in total, including wind and solar farms.

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