kWh Analytics Closes Parametric Wind Proxy Hedge for Apex Clean Energy

Business Wire

Utilizing the kWh Analytics’ Indifference Structure, alongside a parametric Wind Proxy Hedge, allowed Apex Clean Energy to optimize their Rocky Forge Wind financing, transferring the risk of low wind speed from a finance vehicle to Munich Re, an insurance counterparty.

SAN FRANCISCO--(BUSINESS WIRE)--
kWh Analytics, the market leader in Climate Insurance, today announced the successful close of a parametric Wind Proxy Hedge risk transfer deal, this time for a 79MW wind project in Virginia developed by Apex Clean Energy. This innovative financial structure utilized the kWh Analytics Indifference Structure for debt sizing, with Munich Re providing the parametric hedge and MUFG and CIBC serving as lenders to the project.

The wind proxy hedge paired with the kWh Analytics Indifference Structure addresses wind resource volatility by adding investment-grade cash flow above the P99 wind speed scenario, substantially improving the project's credit profile and enabling higher debt capacity.

The structure's implementation with a marquee sponsor in the wind space helps to demonstrate the growing market adoption of this innovative risk transfer solution. The structure generates approximately $7 of additional debt for every dollar of premium paid during the mini-perm period. The hedge provides coverage for wind speeds below a specified meters-per-second threshold, addressing the most challenging downside scenarios.

"Implementation of the Wind Proxy Hedge structure went smoothly, and we are evaluating this product on additional projects," commented a representative from Apex Clean Energy. "The ability to materially improve project returns while reducing equity requirements makes this an attractive financing tool in our development portfolio."

Geoffrey Lehv, SVP & Head of US Accounts for kWh Analytics, noted the broader market implications: "We are thrilled to have contributed to the success of the Rocky Forge Project and excited to execute on this structure with such an experienced sponsor and banking partners.”

Bill MacLauchlan, CEO Munich Re Trading LLC, commented: "The success of this Wind Proxy Hedge transaction demonstrates the market's recognition of this innovative risk transfer solution.”

kWh Analytics served as advisor to Munich Re during the structuring process, applying their expertise in renewable energy risk transfer products and the proprietary Indifference Structure. MUFG and CIBC acted as coordinating lead arrangers for the debt financing.

For more information about the Wind Proxy Hedge and the kWh Analytics Indifference Structure, please contact Geoffrey Lehv, [email protected].

About kWh Analytics

kWh Analytics, a leading Climate Insurance provider, underwrites property insurance and revenue firming products for renewable energy assets. Our proprietary database of 300,000+ zero-carbon projects and $100B in loss data fuels advanced modeling and insights, enabling precise underwriting decisions. This data-driven approach incorporates resiliency measures in risk evaluation, promoting sustainable practices in the renewable energy sector.

Trusted by 11 global (re)insurance carriers, we've insured over $50 billion in assets to date. Our tailored solutions further our mission of providing best-in-class Insurance for our Climate. Recognized by InsuranceERM Climate and Sustainability Awards, kWh Analytics continues to pioneer in the renewable energy insurance sector.

Learn more at https://www.kwhanalytics.com/, or LinkedIn.

ABOUT Munich Re

Munich Re is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. The Group consists of the reinsurance and ERGO fields of business, and the asset manager MEAG. Munich Re is globally active and operates in all lines of the insurance business. Since it was founded in 1880, Munich Re has been known for its unrivalled risk-related expertise and its sound financial position. Munich Re leverages its strengths to promote its clients’ business interests and technological progress. Moreover, Munich Re develops covers for new risks such as rocket launches, renewable energies, cyber risks and artificial intelligence. In the 2024 financial year, Munich Re generated insurance revenue of €60.8bn and a net result of €5.7bn. The Munich Re Group employed about 44,000 people worldwide as of 31 December 2024.

About MUFG and MUFG Americas

Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with over 360 years of history, MUFG has a global network with approximately 2,100 locations in more than 50 countries. MUFG has nearly 160,000 employees and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group aims to be “the world’s most trusted financial group” through close collaboration among our operating companies and flexibly respond to all the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges.

MUFG’s Americas operations, including its offices in the U.S., Latin America, and Canada, are primarily organized under MUFG Bank, Ltd. and subsidiaries, and are focused on Global Corporate and Investment Banking, Japanese Corporate Banking, and Global Markets. MUFG is one of the largest foreign banking organizations in the Americas. For locations, banking capabilities and services, career opportunities, and more, visit www.mufgamericas.com.