HAMILTON, Bermuda, Feb. 28, 2019 /PRNewswire/ -- Nephila Climate ("NCx"), the weather and ESG-driven specialty division of Nephila Holdings Ltd. announced the first use of a Proxy Revenue Swap ("PRS") for the re-powering of a wind project. Ares Management Corporation, a leading global alternative asset manager, is the first to utilize the PRS structure for a repowered project. A PRS is a hedging contract that provides renewable energy projects with protection against exposure to the risks inherent in relying on a weather-driven fuel source, in addition to power price volatility.
A fund managed by Ares's Infrastructure and Power strategy used three different PRS contracts to facilitate the financing for the acquisition and re-powering of the wind power portfolio from BP in the ERCOT region. The three-project portfolio included Sherbino Mesa 2, Trinity Hills and Silver Star.
"Just as the PRS has now become a standard product for de-risking merchant renewable energy projects, we expect it to play a key role in helping sponsors to finance the repowering of wind projects," said Richard Oduntan, CEO of NCx. "With a forecasted surge in repowering projects over the next several years, we are pleased that the Ares PRS transactions will be the vanguard of many more to come."
The projects entered into ten-year PRS contracts with Allianz Global Corporate & Specialty, Inc.'s Alternative Risk Transfer (ART) unit, in partnership with Nephila Climate. REsurety, Inc. provided the risk analytics needed to support the PRS transactions and will serve as the calculation agent on an ongoing basis.
"We continue to break new ground with PRS in using it to support the re-powering of wind projects," stated Karsten Berlage, managing director, Allianz ART. "We are pleased to collaborate with NCx yet again on another 'first,' and to help ARES manage the long-term revenue risks for these projects."
According to Bloomberg New Energy Finance, the market for re-powering is expected to surge in the next two years with 1.25 and 2.02 GW of re-power projects predicted to be completed in 2019 and 2020, respectively, in the US alone.
Nephila Capital Ltd is a leading investment manager specializing in reinsurance risk. Nephila offers a broad range of investment products focusing on instruments such as insurance-linked securities, catastrophe bonds, insurance swaps, and private transactions. Nephila Climate (NCx) is a dedicated weather risk transfer and ESG-driven business. Nephila Capital Ltd has assets under management of approximately $11.5 billion as of February 1 2019 and has been managing institutional assets in this space since it was founded in 1998. The firm has over 130 employees based in their Bermuda headquarters, San Francisco, CA, Nashville, TN and London. Further information can be found at www.nephilaclimate.com or www.nephila.com
About Allianz Global Corporate & Specialty
Allianz Global Corporate & Specialty (AGCS) is the Allianz Group's dedicated carrier for corporate and specialty insurance business. AGCS provides insurance and risk consultancy across the whole spectrum of specialty, alternative risk transfer and corporate business: Marine, Aviation (incl. Space), Energy, Engineering, Entertainment, Financial Lines (incl. D&O), Liability, Mid-Corporate and Property insurance (incl. International Insurance Programs). Worldwide, AGCS operates with its own teams in 34 countries and through the Allianz Group network and partners in over 210 countries and territories, employing almost 4,700 people of 70 nationalities. AGCS provides insurance solutions to more than three quarters of the Fortune Global 500 companies, writing a total of €7.4 billion gross premium worldwide in 2017.AGCS SE is rated AA by Standard & Poor's and A+ by A.M. Best. For more information please visit www.agcs.allianz.com or follow us on Twitter @AGCS_Insurance and LinkedIn. Cautionary Note Regarding Forward-Looking Statements
REsurety is the leading provider of valuation analytics and risk management services to buyers and sellers of renewable energy. With deep expertise at the intersection of weather and power markets, REsurety has built unrivaled databases and analytical systems that enable a more precise understanding of the value and risk of intermittent power generation. Having supported over 5,000 MW of transactions since 2015, REsurety is rapidly changing the way renewable energy is bought and sold across the globe. For more information visit: www.resurety.com
SOURCE Nephila Climate