First new exploration risk insurance placed for Bavarian geothermal project
The first exploration risk insurance in a long time has been signed for the geothermal project in Garching on the Alz in Bavaria, Germany. This new exploration risk insurance policy was sold and developed by NW Assekuranz, a German insurance brokerage.
In an announcement yesterday, German Insurance brokerage Nordwest Assekuranzmakler GmbH & Co. KG (NW Assekuranz) announced having supplied an exploration risk insurance package for the first joint geothermal energy project in the Bavarian municipality of Garching on the Alz of the STRABAG SE subsidiary Ilbau Liegenschaftsverwaltung AG and the RAG Crude Oil Prospecting Company.
As we reported earlier, these companies teamed up and acquired the Garching geothermal project and will develop it under the name Silenos Energy.
The risk of a dry or too cold well (exploration/ discovery risk) is still one of the biggest challenges in financing geothermal energy projects.
Corresponding insurance solutions have not been available since losses due to similar insurance solutions for a geothermal risk insurance in the past. Despite the challenges of the past, NW insurance applied an innovative new and resilient insurance concept that resiliently hedges risk.
In order to promote the investment security of the geothermal energy project in Garching on the Alz, Germany, NW Assekuranz has succeeded in placing this solution, that insures the exploration risk and has not been available to the geothermal sector for a long time.
“The geological and drilling expertise of Silenos Energy in combination with the long-term insurance know-how, strength in innovation and our ability to to build upon lessons-learned, have enabled the insurance industry to reconsider insuring the exploration risk that is such a crucial element in geothermal energy development.”, so the experts of NW Assekuranz, Admir Rahimic and Achim Fischer-Erdsiek.
“Thanks to the close and professional cooperation with NW Assekuranz, we were able to create ideal conditions for the realization of the project with regards to financing security”, added Silenos CEOs Oliver Friedlaender and Christian Steinbauer.
Source: company release by email