Press Release

Mosaic raises capacity to support green finance in developing economies

June 27, 2023

Hamilton, Bermuda—Mosaic Insurance has raised the line size for political-risk coverage to $30 million and extended its funding horizon to support critical financing schemes in developing economies.

The moves underscore the global specialty insurer’s emphasis on sustainable finance in the sector, particularly around green-energy projects that assist emerging nations hard-hit by post-pandemic economic and geo-political shocks. Mosaic has strengthened capacity from $15 to $30 million per political risk, leveraging both its Lloyd’s Syndicate 1609 and trade-partner capital through its syndicated management program. Mosaic also lengthened the tenor, or term provisions, of loan coverage from 10 to 15 years for political-risk insureds such as multilateral and state-owned development banks.

“This is an essential step allowing us to match the market’s appetite for longer-tenor projects and sustainable finance around meaningful infrastructure schemes,” said Finn McGuirk, Mosaic’s Head of Political Risk. “We’re seeing an increase in these types of loans using blended finance tools and innovative products like ‘blue bonds’ that generate funding for marine ecosystems—it’s a win-win for low-income countries and supports their long-term economic stability.”

An example was Mosaic’s recent participation in a ground-breaking debt-for-nature swap that will help conserve the remote Galápagos Islands. The blue-bond deal, led by the government of Ecuador, the US International Development Finance Corporation (DFC), the Inter-American Development Bank, and other financial entities, provided more than $450 million for marine conservation to protect the biodiverse archipelago through 2041.

“In recent years, the world economy has suffered successive crises—from rising interest rates and food insecurity to deglobalization. Developing countries have been impacted disproportionately as their debt levels rise, making it harder to invest in recovery,” said Natalya Tyson, VP, Underwriter, Political Risk, at Mosaic. “We’re pleased to support projects behind institutions committed to affordable, long-term green finance, and we take pride in working with our valued clients in this sphere.”

Sustainable finance and green investments have steadily grown since the adoption of the United Nations 2030 Agenda for Sustainable Development and the 2015 Paris Agreement on Climate Change, with increasing public-private collaboration.

“Renewable-energy infrastructure can require longer financing support behind multilaterals, typically on a semi-concessional basis, provided at below-market interest rates,” noted Tyson. “But the longer timeframe is more affordable and helps re-align low-income nations’ debt profiles to make the burden more manageable.”

Mosaic has political risk underwriters based in London, Dubai, and New York offices. It is one of the company’s seven specialty lines of business across seven geographies; others include transactional liability, cyber, environmental liability, financial institutions, political violence, and professional liability.