WASHINGTON - (Business Wire) Zurich’s Surety, Credit and Political Risk group today announced it is providing trade credit insurance for a hydroelectric power plant in Chile. CQuest Capital, which is advancing funds to the project against delivery of carbon credits to be generated from the project, engaged Alliant Emerging Markets to develop an insurance program to mitigate the political and counterparty default risks in the transaction. The insurance solution, a trade credit insurance policy customized to meet CQuest Capital’s specific requirements, was provided by Zurich. The $29-million Hidromaule S.A. project is a l9-megawatt run-of-the-river hydro electric project that will help address a growing need for electricity in Chile, reducing the country’s reliance on imports and diesel generated power. The International Finance Corporation is providing nearly $21.7 million in debt financing to the project.
The project is currently being registered by the Executive Board of the United Nations Framework Convention on Climate as a Clean Development Mechanism project. This qualifies it to sell Certified Emissions Reductions (CERs) under the Kyoto Protocol. It is anticipated that Hidromaule S.A. will generate 50,000 CERs annually from 2008 through 2012, generating an estimated nearly $1 million in additional revenue to the project each year.
Under the Kyoto protocol – an international treaty created to reduce greenhouse gas (GHG) emissions linked to global warming – certain types of projects are eligible for carbon credits based on the level of greenhouse gases reduced. The protocol provides the means to monetize the environmental benefits of reducing GHGs and sell the emissions credits. Zurich’s trade credit policy insures against the risk of non-payment following non-delivery of the anticipated CERs.
“We are pleased Alliant Emerging Markets selected us to be an integral part of this environmentally sensitive project,” said Daniel Riordan, president of Zurich’s Surety, Credit and Political Risk unit. “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.”
Zurich has established a market-focused global climate initiative to understand the emerging weather, financial and regulatory risks associated with climate change and to develop products and services that help customers cope with these risks. The climate initiative has three main elements: an internal Climate Office responsible for developing and implementing Zurich’s global climate change strategy; a Climate Change Advisory Council to advise Zurich’s management on strategic and operational issues associated with climate change; and an Applied Research Program with organizations and institutions that can bring multi-disciplinary expertise to bear on the issues associated with climate change.
Zurich Surety, Credit & Political Risk is a leading provider of contract and commercial surety, trade credit and political risk insurance products worldwide. Surety, Credit & Political Risk serves customers through underwriting offices located in 35 cities throughout North America, as well as Barcelona, Beijing, Frankfurt, Hong Kong, London, Paris, Sao Paulo, Singapore, Sydney, Tokyo and Zurich.
Zurich provides surety bonds, political risk and trade credit insurance for financial institutions, multinational corporations, investors, exporters, contractors and infrastructure developers in North America and emerging markets.
About Zurich
Zurich’s North America Commercial and Global Corporate in North America business divisions are part of Zurich Financial Services Group (Zurich), an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets. Founded in 1872, the Group is headquartered in Zurich, Switzerland. It employs approximately 60,000 people serving customers in more than 170 countries. In North America, Zurich (www.zurichna.com) is a leading commercial property-casualty insurance provider serving the global corporate, large corporate, middle market, specialties and programs sectors.
About CQuest Capital
C-Quest Capital LLC (CQC), established in October 2008, brings together innovators of the global carbon market with leaders in alternative energy project development and risk management and commodities trading. Our management has experience developing and managing the world’s first carbon funds at the World Bank, and has been pivotal establishing major private sector carbon finance businesses in New York and London.
About Alliant Emerging Markets and Alliant Insurance Services
Alliant Emerging Markets, a specialty practice of Alliant Insurance Services, is a leading consultative political and credit risk brokerage group, serving global corporations, banks, investment firms, private equity firms, and energy companies. Headquartered in Newport Beach, Calif., and part of the Blackstone Group company portfolio, Alliant Insurance Services, Inc. (www.alliantinsurance.com) is a specialty insurance brokerage firm that provides property and casualty, workers’ compensation, employee benefits, surety, and financial products and services to more than 15,000 specialized clients in the U.S.
Insurance coverages underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Certain coverages not available in all states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.
Media contact:
Steve McKay
Zurich
(847) 706-2265
steven.mckay@zurichna.com
