Ocean Energy Advisors (OEA) has completed the first phase of the industrial research project that explored the link between the insurance and debt in relation to bankability of tidal power.
The aim of the first phase of ‘The Insurance-Debt Nexus: Can risk policy make tidal power bankable?’ research was to explore how public support could enable the insurance sector to underwrite business interruption insurance, so that project developers can raise capital through project finance for tidal stream power.
Business interruption insurance is a form of insurance coverage that replaces business income lost as a result of an event that interrupts the operations of the business.
The research was focused on finance, insurance, and policy, and through structured questioning with insurers, lenders, policy-makers and technical specialists, it was found that there was opportunity for project finance to enable project developers to raise capital for tidal stream power.
According to OEA results, the opportunity for business interruption insurance to enable lenders to provide project finance for tidal stream power exists, but when it comes to public support enabling insurers to underwrite business interruption insurance for tidal stream power, it was found that the opportunity existed, but it would be best to test it empirically – learning through doing.
OEA is a project development advisory firm specializing in the economic generation of electrical power from the energy in tides and waves.
To remind, OEA recently teamed up with Renewable Risk Advisers (RRA) to develop products to support project finance for tidal stream, and other emerging technologies.