kWh Analytics Closes Parametric Wind Proxy Hedge for Apex Clean Energy

kWh Analytics, the market leader in Climate Insurance, 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.

kWh Analytics | https://www.kwhanalytics.com/

Mitsubishi UFJ Financial Group | www.mufgamericas.com