Underwriting a Greener Future®
Feedstock Supply Insurance
Ecostrat and New Energy Risk have joined forces to develop Feedstock Supply Insurance (FSI), a revolutionary solution for the bioeconomy.
Feedstock Supply Insurance© (FSI) is a pioneering insurance solution currently under development to de-risk and stabilize biomass supply chains, addressing the critical barriers that have long stunted investment in bioenergy projects. By offering protection against feedstock price volatility and supply disruptions, FSI will empower investment-grade financial structures, accelerating bio-project development.
The Challenge
Biomass supply chains are fundamentally risky because they consist largely of small and medium-sized suppliers such as sawmills, forestry companies, farmers, and truckers. Biomass suppliers are rarely investment-grade and often unable to provide the long-term, bankable supply contracts necessary for project financing. Traditional balance sheet financing becomes nearly impossible. Risk is transferred onto investors, suppliers, governments, and the projects themselves.
The consequences are severe. They can be seen in significant project financing barriers for bioenergy projects and millions of dollars of “financial drag” on the projects that are eventually built.
The Solution
FSI will transform fragmented, non-investment-grade supply chains into bankable supply chains by transferring risk from project developers and capital providers to A-rated insurance markets.
It will provide investment-grade backstops for biomass feedstock risk and guarantee key warranty obligations, such as debt repayment.
We expect a range of positive outcomes, from lower project debt costs, to access to larger pools of capital– and ultimately, to a faster scaleup of the global bioeconomy.