Mosaic doubles political risk capacity; green energy in sight

Global specialty insurer  Mosaic has doubled its capacity for political risk coverage to $30 million per political risk and is also extending its funding horizon to support financing schemes in developing economies.

Mosaic said it was particularly focusing on sustainable finance in the sector, particularly around green-energy projects that assist emerging nations hard-hit by post-pandemic economic and geo-political shocks.

Mosaic has strengthened capacity from $15 million to $30 million per political risk, leveraging both its Lloyd’s Syndicate 1609 and trade-partner capital through its syndicated management programme. Additionally, it has lengthened the tenor, or term provisions, of loan coverage from 10 to 15 years for political-risk insureds such as multilateral and state-owned development banks.

“This is an essential step allowing us to match the market’s appetite for longer-tenor projects and sustainable finance around meaningful infrastructure schemes,” said Finn McGuirk, Mosaic’s head of political risk. “We’re seeing an increase in these types of loans using blended finance tools and innovative products like ‘blue bonds’ that generate funding for marine ecosystems — it’s a win-win for low-income countries and supports their long-term economic stability.”

An example was Mosaic’s recent participation in a ground-breaking debt-for-nature swap that will help conserve the remote Galápagos Islands, the area that inspired Darwin’s theory of evolution. The blue-bond deal, led by the government of Ecuador, the US International Development Finance Corporation (DFC), the Inter-American Development Bank, and other financial entities, provided more than $450 million for marine conservation to protect the biodiverse archipelago through 2041.

Natalya Tyson (pictured), underwriter for political risk at Mosaic, said: “In recent years, the world economy has suffered successive crises — from rising interest rates and food insecurity to deglobalisation. Developing countries have been impacted disproportionately as their debt levels rise, making it harder to invest in recovery.

“We’re pleased to support projects behind institutions committed to affordable, long-term green finance, and we take pride in working with our valued clients in this sphere.”

Sustainable finance and green investments have steadily grown since the adoption of the United Nations 2030 Agenda for Sustainable Development and the 2015 Paris Agreement on Climate Change, with increasing public-private collaboration.

“Renewable-energy infrastructure can require longer financing support behind multilaterals, typically on a semi-concessional basis, provided at below-market interest rates,” Tyson added. “But the longer timeframe is more affordable and helps realign low-income nations’ debt profiles to make the burden more manageable.”

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