Priced: Munich Re EUR1.25B 20.75NC10.75 Tier 2 MS+147

Priced: Munich Re EUR1.25B 20.75NC10.75 Tier 2 MS+147

In a significant development for renewable energy financing, Greenbacker Capital Management has successfully closed a groundbreaking wind proxy hedge risk transfer product for a 59MW wind project in Maine. This innovative financial structure, facilitated by kWh Analytics and Munich Re, has enabled the project sponsor to raise approximately 20% more debt capital [1].

The wind proxy hedge, provided by Munich Re, is a parametric risk-transfer solution that addresses the volatility of wind speed. By pairing this hedge with the kWh Analytics Indifference Structure, the project's P99 scenario has been significantly improved, enhancing its attractiveness to lenders and increasing its debt capacity [1].

Geoffrey Lehv, Head of US Accounts for kWh Analytics, commented on the innovation: “We provided a proprietary debt structure, applying modeling, analysis, and risk management expertise to assist Munich Re in incorporating its parametric solution to a project financing. The resulting credit enhancement not only mitigates downside risk but also optimizes capital structure. This is about more than just financial engineering – it's about accelerating the transition to clean energy by making wind projects more bankable and attractive to investors” [1].

Bill MacLauchlan, CEO Munich Re Trading LLC, noted the importance of deep project finance knowledge in structuring the transaction. “By leveraging our team's long-standing expertise in designing parametric risk-transfer solutions, collaborating closely with MUFG, and utilizing kWh Analytics' unique position in the market, we successfully implemented an innovative risk transfer solution for this Sponsor” [1].

Alberto Mihelcic Bazzana, Director at MUFG, highlighted the significance of the partnership in developing new financing solutions. “As a leader in project finance, MUFG is pleased to partner with Greenbacker, kWh Analytics, and Munich Re in developing new financing solutions that can expedite the energy transition process” [1].

This transaction marks a significant milestone in the application of parametric wind hedges and the kWh Analytics Indifference Structure, demonstrating their potential to enhance project financing for renewable energy projects. For more information about the wind proxy hedge and the kWh Analytics Indifference Structure, please contact Geoffrey Lehv at geoffrey.lehv@kwhanalytics.com.

References:
1. [https://www.businesswire.com/news/home/20240723537354/en/kWh-Analytics-Pioneers-First-of-its-Kind-Parametric-Wind-Proxy-Hedge-for-Greenbacker-with-Munich-Re-MUFG](https://www.businesswire.com/news/home/20240723537354/en/kWh-Analytics-Pioneers-First-of-its-Kind-Parametric-Wind-Proxy-Hedge-for-Greenbacker-with-Munich-Re-MUFG)