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“In a true first for both the insurance and carbon finance markets, CFC built a policy that reduces the risk associated with providing debt financing to carbon credit projects,” the firm explained.<\/p>\nSpecialist insurance provider CFC has developed a new insurance policy, first deployed with Standard Chartered Bank, designed to cover commercial loans to carbon credit projects.<\/p>\n
“In a true first for both the insurance and carbon finance markets, CFC built a policy that reduces the risk associated with providing debt financing to carbon credit projects,” the firm explained.<\/p>\n
On the back of this successful deployment, CFC is reportedly in the process of bringing the lender insurance product to more banking institutions to enable them to provide commercial loans for carbon credit projects.<\/p>\n
George Beattie, Head of Innovation at CFC, commented, \u201cThe International Monetary Fund estimates that the world needs to invest in the region of $2 trillion annually by 2030 if it is to reach its goal of net zero by 2050. Governments simply don\u2019t have this type of money readily available and it is clear that the private sector is going to play the most vital role.<\/p>\n
\u201cThis creates the single biggest lending opportunity for banks and other financial institutions in history, and we believe that insurance can and must play an essential role in helping these institutions to derisk their financing activities directed at high-quality carbon initiatives.\u201d<\/p>\n
Beattie continued, \u201cWe have developed this brand new Carbon Lender Insurance policy to deliver risk mitigation for lenders.<\/p>\n
“We believe this will open up new opportunities for them to offer financing to high-quality carbon projects and, having taken the lead, hope this signifies the starting gun for the insurance sector to redouble efforts to drive positive climate finance.\u201d<\/p>\n
Chris Leeds, Head of Carbon Markets Development at Standard Chartered Bank, said, \u201cThis is a great example of how lending institutions and the insurance industry can combine the best of their commercial and innovative skills to facilitate greater investment in the nascent carbon dioxide removals market by the private sector and help our planet reach net zero by 2050.<\/p>\n
\u201cWe understand the huge role that the lending community must play in the global fight against climate change. CFC\u2019s unrivalled talent and innovative approach helped us solve key problems that unlocked our capacity to lend.<\/p>\n
“The solution they created represents a significant step forward in helping derisk the loan process as our business seeks to accelerate climate finance around the world.\u201d<\/p>\n
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