The European Investment Bank (EIB), Munich Re and the African Trade Insurance Agency (ATI) have set up a facility dedicated to providing political risk reinsurance for green energy projects in Africa.
The Africa Energy Guarantee Facility (AEGF) aims to help unlock $1.4bn of clean energy investment across 25 sub-Saharan African countries.
The facility will offer private investors insurance against non-payment of power purchase agreements, expropriation and breach of contract, currency inconvertibility, war, civil unrest and arbitration awards.
Munich Re chief executive Joachim Wenning said: “The AEGF will remove a major obstacle for renewable energy investments in Africa.
“(It) is a blueprint for risk-sharing between insurers, reinsurers and international financial institutions and we strive to address other impediments to the development of emerging countries with comparable solutions.”