kWh Analytics, a provider of climate insurance and risk management for renewable energy projects, has closed a parametric Wind Proxy Hedge risk transfer deal, backed by Munich Re, for Apex Clean Energy’s 79MW wind project in Virginia.
By combining the wind proxy hedge with the Indifference Structure, it addresses wind resource volatility by adding investment-grade cash flow above the P99 wind speed scenario. This significantly enhances the project’s credit profile and supports greater debt capacity.
The structure’s implementation with a marquee sponsor in the wind space underscores the growing adoption of this risk transfer solution.
It generates approximately $7 of additional debt for every dollar of premium paid during the mini-perm period. The hedge protects against wind speeds falling below a specified meters-per-second threshold, addressing the most challenging downside scenarios.
A representative from Apex Clean Energy said, “Implementation of the Wind Proxy Hedge structure went smoothly, and we are evaluating this product on additional projects.
“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, added, “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, while MUFG and CIBC acted as coordinating lead arrangers for the debt financing.
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