Parametric Yield Insurance for Hydroelectric Plant Revenue Loss

Our parametric covers offer an alternative solution

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The renewables sector often experiences:

Financing risk and future cash flow uncertainty due to varying availability of natural resources

Insufficient insurance coverage: financial loss due to low water discharge are excluded from traditional 'all risk policies'

Disruptions and delays during transportation & construction

Clients forced to pay significant additional project costs due to weather-driven damage/delays

Hydroelectric dam with open floodgates

Key benefits

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Fresh capacity:

Parametric products offer an alternative to un-insured risks

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Customised protection:

Flexible and straight-forward structure tailored to clients needs

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Transparency:

Certainty of indemnification with pre-agreed thresholds & payout amounts

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Timely claims payment:

On-site monitoring, weather stations, & location data permit for real-time claims assessment & quick payout following a triggering event. Allowing clients the flexibility to allocate funds towards repair costs that help speed up the return to full-operation

case study example

Hydroelectric power company in East Asia

Learn how a parametric cover could cover a hydroelectric power company in East Asia:

Problem

A large hydroelectric power company in East Asia was exposed to the risk of decreased power generation due to low water levels. However, such financial losses were excluded from their insurance program, thus the client was left with an uncovered revenue gap of $6M in recent years, impacting their profit margins and financial goals. 

Solution

With a parametric cover, the client would receive a cover that is triggered when the daily river flow falls to critical levels, resulting in a reduced power generation capacity of 20% or more. 

Result

At the end of the risk period, the client would be swiftly paid a corresponding indemnity for each day that the water level fell below the predefined power generation index, stabilizing their revenue and retaining their profit margins.

payout structure
The client would receive $6M USD

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