Kita, a Lloyd’s of London coverholder focused on innovative risk transfer solutions for emerging markets, has expanded its portfolio of carbon insurance products and services with the launch of a new non-payment insurance (NPI) policy aimed at lenders financing carbon and natural capital projects.
The new policy has been introduced in response to growing demand for financial structures that can support the scaling of credible carbon and nature-based initiatives, according to FF News.
While interest from banks and investors in climate-related projects continues to rise, many deals remain stalled due to concerns around counterparty credit risk and non-payment. Kita’s latest offering is designed to address these barriers and help unlock capital across global carbon and natural capital markets.
Kita provides specialist insurance solutions that enable risk transfer for complex transactions, particularly in areas where traditional financing mechanisms fall short.
Operating within the Lloyd’s market, the company works with insurers, banks and project developers to structure policies that support trade, project finance and sustainability-linked investments.
Its latest product is backed by key Lloyd’s syndicates, led by credit and political risks (re)insurer MS Amlin, with additional support from Chaucer Group and Tokio Marine Kiln.
The NPI policy protects lenders against the risk of non-payment linked to project finance, prepayment facilities, offtake receivables and other credit exposures associated with carbon and natural capital projects.
By transferring counterparty credit risk onto A-rated insurance balance sheets, the policy helps reduce loss-given-default for lenders, supports regulatory capital relief for banks and has the potential to lower the cost of capital for project sponsors.
The product is designed to be flexible across a range of financing structures. It can be applied to pay-on-delivery and prepayment models to de-risk receivables and pre-finance working capital, as well as to project finance transactions where wrapping counterparty exposures can improve bankability.
The policy can also be used at portfolio level, protecting aggregated exposures across multiple projects and jurisdictions, and can be aligned with sustainability milestones and verified delivery frameworks.
For project developers, the availability of NPI can translate into easier access to debt and investment. Where projects struggle to secure financing due to counterparty credit concerns, the policy can provide the security required to move deals forward.
By shifting non-payment risk to a rated insurer, lenders and buyers can price transactions more efficiently, often approving deals faster and on more attractive terms. Typical use cases include pre-financing against contracted offtakes, working capital for scale-up and improving lending conditions for large-scale infrastructure projects.
The launch follows a period of significant expansion for Kita, including a reported 450% increase in underwriting capacity, the ability to insure additional project types such as Soil Organic Carbon, and the evolution of its non-delivery insurance to cover both supply-side and demand-side risks.
“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,” MS Amlin political risk underwriter Louise Scott said.
“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,” Kita managing director – insurance James Kench CFA said.
“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,” Kita head of underwriting Alek Pillay said.
NPI is available immediately through specialist credit and political risk insurance brokers and directly via Kita for qualified counterparties.
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