Tokio Marine Kiln (TMK) has collaborated with Kita to provide political risk insurance for developers and investors in carbon credit projects. The product, led by Ed Parker, head of special risks at TMK, will protect against risks such as confiscation, nationalisation, forced abandonment, licence cancellation, and political violence. It is designed to ensure compensation for both parties in the event that the host country of a project rescinds agreements permitting the use of credits for external offsetting strategies. The firms say the availability of cover will also increase the viability of new projects and enable new, high-quality projects to proceed, with the rigorous assessment provided by Kita and TMK, affording an added layer of reassurance to investors. Parker notes: “So many industries are facing increasing regulation around their offsetting and developers simply cannot afford to keep investing in the creation and maintenance of projects if they won’t be able to sell the credits when they are revoked. “Our partnership with Kita will provide much-needed security against these risks and make the development of carbon projects more sustainable long-term.” James Kench, head of insurance at Kita, adds: "Political risk insurance has the potential to significantly mitigate the risks?associated with correspondingly adjusted credits and protect anyone investing or operating in politically uncertain environments. “Working with TMK to deliver this essential cover will help unlock more investment into the voluntary carbon market to drive climate action now."
