Government-funded Nippon Export and Investment Insurance (NEXI) is strengthening its support for renewable energy projects overseas. An insurance contract for a wind power generation project in Egypt will be concluded by the end of the year and export insurance will be provided for a project involving small-scale power plants in South Asia and Africa. NEXI hopes that its involvement in overseas projects will compensate for the current sluggish demand for export insurance.
The project in Egypt aims to build wind-generated power plants along the Gulf of Suez to produce approximately 500 megawatts of electricity by around 2024. Toyota Tsusho Corporation and other companies from Japan will participate. NEXI will provide insurance for investments made by the Japanese corporations, covering up to 97.5% of losses incurred from local disputes. NEXI expects to underwrite the insurance worth several dozen billion yen for the project.
This is the second phase of the Gulf of Suez project. NEXI extended the insurance coverage in the project’s first phase, which started in 2017 as well. In the hope of expanding operations in the region, NEXI signed a memorandum of cooperation on Oct. 20 with the European Bank for Reconstruction and Development (EBRD), which has long experience in financing in Central and Eastern Europe as well as in North Africa.
NEXI expects that the market for renewable energy and environmental projects will further expand in newly emerging and developing countries. NEXI was involved in a land-based wind power project in Morocco and a geothermal power generation project in Indonesia in the past. (Abridged)