Kita, a Lloyd’s of London coverholder, has launched a non-payment insurance (NPI) policy aimed at protecting lenders that finance carbon and natural capital projects, with capacity led by credit and political risks specialist MS Amlin and supported by Chaucer Group and Tokio Marine Kiln.
In a media release on 8 January, Kita said its new product intends to help unlock funding and speed up deal execution by replacing or complementing traditional guarantees, while allowing developers to secure better financing terms for projects ranging from early-stage scale-up to large infrastructure across multiple jurisdictions.
The NPI policy is designed to protect banks and investors from the risk of non-payment under project finance, prepayment facilities, offtake receivables and other credit exposures, transferring counterparty credit risk to A-rated insurance balance sheets to reduce loss-given-default, support regulatory capital relief and potentially lower funding costs for project sponsors.
The cover can be applied across pay-on-delivery and prepayment structures, project finance special purpose vehicles, and portfolio or warehousing arrangements. It can also be aligned with sustainability performance milestones and verified delivery frameworks to support scalable global climate finance.
“Financing the transition needs more than good intentions – it needs bankable risk transfer,” said James Kench CFA, managing director for insurance at Kita, as he explained that by moving non-payment risk onto a regulated insurer balance sheet, NPI gives lenders and buyers the confidence to fund credible carbon and nature projects at scale and move them “from pipeline to real-world impact.”
“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,” Louise Scott, political risk underwriter at MS Amlin, said.
Kita’s announcement continues the company’s market expansion, 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 both supply-side and demand-side risks.
