Mosaic Insurance raises capacity to support green finance in developing economies

Written by Michael Griffiths

28/06/2023

Mosaic Insurance has raised its line size for political-risk coverage to $30m and extended its funding horizon to support critical financing schemes in developing economies.

The speciality insurer suggested the moves underscore its emphasis on sustainable finance in the sector, particularly around green energy projects that could assist emerging nations that have been hit hard by post-pandemic economic and geopolitical shocks.

Mosaic has strengthened capacity from $15m to $30m per political risk, leveraging both its Lloyd’s Syndicate 1609 and trade-partner capital through its syndicated management programme. Mosaic also lengthened the term provisions of its 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,” commented head of political risk at Mosaic, Finn McGuirk.

“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.”

One example of this was Mosaic’s recent participation in a debt-for-nature swap that will help conserve the remote Galápagos Islands. 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 $450m for marine conservation to protect the biodiverse archipelago through to 2041.

“In recent years, the world economy has suffered successive crises—from rising interest rates and food insecurity to deglobalization,” added VP, underwriter, political risk at Mosaic, Natalya Tyson. “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.”

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