The latest from Kita for you;
Kita, a Lloyd’s of London coverholder, broadens its innovative suite of carbon insurance products and services with the launch of a new policy designed to offer protection to lenders that finance carbon and natural capital, backed by key Lloyd’s syndicates led by the established and highly respected credit and Political Risks (re)insurer MS Amlin, with support from Chaucer Group and Tokio Marine Kiln.
What NPI does:
NPI protects lenders against the risk of non-payment under project finance, prepayment facilities, offtake receivables and other credit exposures associated with carbon and natural capital projects. By transferring counterparty credit risk to A-Rated insurance balance sheets, NPI helps reduce loss-given-default, supports capital relief for banks and has the potential to enable lower cost of capital for project sponsors.
Why it matters:
- Unlocks funding: NPI helps banks and investors move past credit concerns and back credible carbon and nature projects.
- Faster deals: Insurance cover can replace or complement traditional guarantees, speeding up time-to-close.
- Better terms: Developers can access more attractive financing for projects, from early-stage scale-up to large infrastructure.
- Scalable impact: The policy can be applied to standalone projects or to portfolios across multiple jurisdictions, thereby supporting global climate finance.
Where it fits:
- Pay-on-delivery and prepayment structures: De-risk receivables and pre-finance working capital against future deliveries.
- Project finance: Wrap counterparty exposures in SPV structures to improve bankability.
- Portfolio and warehousing: Protect aggregated exposures across multiple projects and jurisdictions.
- Alignment with sustainability objectives: Cover can be aligned to performance milestones and verified delivery frameworks.
For Project Developers:
For project developers, this means easier access to debt and investment. If a project is struggling to raise debt or to finalise an offtake because a counterparty’s credit is the blocker, NPI can provide the security needed to move forward.
By shifting non-payment risk to a rated insurer, counterparties can price and approve deals faster – often at a lower cost of capital. Typical use cases include pre-finance against contracted offtakes, working capital for scale-up, and improving lender terms on project finance.
Industry Comment:
Louise Scott, Political Risk Underwriter at MS Amlin, said: “We’re proud to be the lead capacity provider, which reflects our belief in the role insurers can play in unlocking capital for climate and nature -based initiatives, an area we’ve made significant inroads into, recently. The transition to a low carbon economy depends on the ability to finance credible projects and grow them at scale – yet many stall due to counterparty credit risk. This solution helps overcome that challenge and enables banks to deploy capital with greater confidence, especially in emerging markets.”
James Kench CFA, Managing Director – Insurance, Kita:
“Financing the transition needs more than good intentions – it needs bankable risk transfer. Non-Payment Insurance gives banks and investors the confidence to fund credible carbon and nature projects at scale. By moving counterparty risk onto a strong, regulated balance sheet, Kita’s NPI can offer lenders and buyers the protection they need to unlock capital and move projects from pipeline to real-world impact.”
Alek Pillay, Head of Underwriting, Kita:
“NPI has been supporting banking activity across a wide range of markets and sectors for many years, often as a pre-requisite for a deal to be finalised. Acting as a risk transfer mechanism, it can strengthen a transaction by mitigating risks such as project performance, counterparty creditworthiness and offtake dynamics. With capacity led by MS Amlin, Kita is aiming to bring these benefits to the carbon and natural capital markets to help them scale.”
Today’s announcement continues a period of significant market expansion for Kita, including a 450% increase in underwriting capacity, the ability to insure additional project types, such as Soil Organic Carbon and the evolution of Non-Delivery Insurance to cover supply-side as well as demand-side risk.
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