Allianz Global Corporate & Specialty’s (AGCS) alternative risk transfer unit has executed a 10-year proxy revenue swap for Invenergy’s under-construction Upstream Wind Energy Center in Nebraska.
According to Allianz, the proxy revenue swap protects the new wind project’s revenues from the financial risks associated with future energy prices and the uncertain volume and timing of energy generation. The 202.5 MW Upstream project, located in Antelope County, is expected to begin producing energy in the fourth quarter.
The Upstream transaction marks the fourth proxy revenue swap to be executed since the hedging product was launched in 2016. As with prior proxy revenue swap transactions, Nephila Climate partnered with Allianz in managing the risks associated with the transaction. REsurety Inc., which provided the risk analytics used to support underwriting of the hedge prior to its close, will serve as the calculation agent on an ongoing basis.
“We’ve been considering the proxy revenue swap structure since it came to market and saw a great opportunity to apply this innovative new hedging structure to Upstream. De-risking our future revenues with this hedging structure was critical to securing the project’s financing,” notes Jim Shield, executive vice president and chief commercial officer at Invenergy.
Allianz’s managing director, Karsten Berlage adds, “The Upstream transaction serves as further confirmation of the value that wind projects see in the holistic revenue risk management enabled by the proxy revenue swap product.”