Macquarie Capital executes first Proxy Revenue Swap in Australia

Nephila Climate And Allianz Close Proxy Revenue Swap And Corporate PPA For Macquarie Capital’s Lal Lal Wind Farm

HAMILTON, Bermuda, June 19, 2018 /PRNewswire/ — Nephila Climate (“NCx”), the weather and ESG-driven specialty division of Nephila Holdings Ltd., together with Allianz Global Corporate & Specialty’s alternative risk transfer unit (“Allianz”), announced today that they have closed two related transactions to offset future price and volume risk for the Lal Lal wind farm project (“Lal Lal”), being developed in Victoria, Australia. Lal Lal is owned by a partnership comprising InfraRed Capital Partners, Macquarie Capital and Northleaf Capital.

One of the transactions is a Proxy Revenue Swap with Lal Lal and will provide the new wind farm with a high degree of revenue certainty, with Nephila Climate and Allianz assuming production volume, timing of energy generation and future energy price risks. The second transaction will help Orora Ltd., a large consumer of electricity, lock in the cost of procuring baseload green energy from the Lal Lal project, without the production variability traditionally associated with power purchase agreements. These two transactions combined, mark the first time a Proxy Revenue Swap has been applied to wind energy in Australia.

The 228 MW Lal Lal project, located in Central Highlands, Victoria, expects to begin producing energy in the third quarter of 2019. In total, the Proxy Revenue Swap product has now been transacted on more than one GW of renewable energy (wind and solar) development projects.

Nephila Climate’s CEO Richard Oduntan said: “NCx is delighted to provide innovative solutions to another wind farm development while simultaneously helping a commercial and industrial consumer of electricity purchase green energy in the form that suits their needs.”

Allianz’s Managing Director Karsten Berlage also noted “We are excited to create and commercialize this new risk management tool for the Australian renewables industry following our successful provision of hedging solutions for investments in North America.”

Key advisers on the transactions included:

  • REsurety as risk analytics provider to Nephila and Allianz and will also serve as calculation agent.
  • Risk Solutions International (Pty) Ltd and CQ Partners as local intermediaries 
  • Norton Rose Fulbright as legal advisers to Allianz and Nephila
  • Herbert Smith Freehills as legal advisers to Macquarie Capital 
  • Andrew George from Amanzi as commercial adviser to Macquarie Capital

Reposted as in CISION PR Newswire.

Return to the press release main menu.