The winner of this year's climate risk transfer deal of the year is a product designed to protect wind farms against the risk the wind does not blow, thus providing crucial support to operators and financiers of clean energy projects.

kWh Analytics, a managing general agency that specialises in sustainable energy insurance, worked with reinsurer Munich Re, sustainable infrastructure advisor Greenbacker Capital Management and lender MUFG to develop a groundbreaking "wind proxy hedge" (WPH) for a 59MWwind project in the US state of Maine.

Wind is a volatile resource and if it blows below expected levels, it can dent revenues from the wind farm. But the WPH essentially guarantees a minimum level of revenue even if the winds are weaker than envisaged. This can dramatically affect the equity-debt balance in the financing structure by making the project more attractive to lenders.

By incorporating the WPH, kWh Analytics says each dollar of premium paid for the product resulted in approximately $6 of additional loan proceeds. For the Maine project, it enabled the project sponsor to raise roughly 20% more debt capital.

kWh Analytics contributed its modelling, analysis and risk management expertise to the WPH, as well as its proprietary structure for tailoring the hedge strike price to quarterly cash flows.

The firm has since announced another deal using the same structure, supporting a 79MW wind project in Virginia.

As the firm's head of US accounts, Geoffrey Lehv, says: "This is about more than just financial engineering – it's about accelerating the transition to clean energy by making wind projects more bankable and attractive to investors."