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CASE STUDY 25:                 CHINA – WIND REINSURANCE FACILITY

 Barriers                Lack of underwriting experience and expertise

 Instrument              Reinsurance facility

 Application             n/a

 Amount                  n/a


PROJECT BACKGROUND AND OBJECTIVES                             INSTITUTIONAL ARRANGEMENTS
UNEP worked together with Marsh in assessing the              The facility was envisage to be structured to combine
feasibility of a reinsurance facility for large and medium    the optimal balance of underwriting leadership, highly
scale wind farms in China.                                    rated security, capacity, technical expertise and claims
                                                              handling experience. The facility will utilise established
Although wind energy insurance is broadly available
                                                              renewable energy leaders with existing business
with domestic market in China, the domestic insurance
                                                              relationships and experience in the Chinese insurance
industry has limited underwriting experience and
                                                              market.
expertise in respect of revenue stream protection during
construction and operational phases, which inhibits
developer’s access to debt refinancing. Therefore, the
objective of the reinsurance facility is to improve
investment grade credit rating for wind energy projects
and attracting alternative risk capital to support new risk
management market structures. The reinsurance facility
also aims to attract multi-lateral lenders or guarantors
within a public-private partnership framework to
minimise the need to extend risk and draw specialist
engineering consultancy services to a wind energy
financial risk management platform on a portfolio
versus project basis.

INSTRUMENTS USED
                                                              OUTCOMES
A renewable energy reinsurance facility of a “Special
Purpose Underwriting Vehicle (SPUV)� with direct focus        The feasibility study was completed in 2008 and an
on projects related to wind energy.                           implementation plan was drawn.

Further reading
MARSH – UNEP, Feasibility Study for a RE Insurance Facility for the People’s Republic of China, 2008 – click here
GEF – UNEP, Feasibility Studies for the Development of Insurance Solutions for RE projects, 2008 – click here




1 | R E F I N e www.worldbank.org/energy/refine