Zurich’ Surety, Credit and Political Risk group is providing trade credit insurance for a hydroelectric power plant in Chile.
CQuest Capital, advancing funds against delivery of carbon credits to be generated from the project, has engaged Alliant Emerging Markets, a consultative political and credit risk brokerage, to develop an insurance program. The program is expected to ease the political and counterparty default risks in the transaction. The insurance suit, a trade credit insurance policy customised to meet CQuest Capital’s requirements, was provided by Zurich.
The $29 million Hidromaule SA project is 19mw run-of-the-river hydro electric project, that is expected to address the growing needs of electricity in Chile. It is anticipated that Hidromaule SA would generate 50,000 Certified Emissions Reductions (CERs) annually, generating approximately $1 million additional revenue to the project each year.
Zurich’s trade credit policy insures against the risk of non-payment following non-delivery of the anticipated CERs.
Daniel Riordan, President, Credit and Political Risk unit, Zurich’s Surety, said: “Zurich is committed to working with companies in emerging markets to support investment in alternative energy projects. Trade credit coverage offers a level of protection needed for private investors developing efficient power sources.”
