Standard Product Features – African Trade Insurance

Energy Solutions

Standard Product Features

You can count on all of ATI’s products to feature the following:

Tenor
ATI can make commitments for relatively long periods. The maximum time commitment will depend on the type of risk and the nature of the underlying transaction. For example:

  • For commercial risks (risk of default of a private obligor), we may insure up to five years, but there are exceptions
  • The maximum tenor for political risk (including off-taker risk) is between 10 and 15 years
  • In general, ATI follows the OECD consensus rules that most Export Credit Agencies apply. Here, too, exceptions are possible

Premiums
ATI charges a premium for the risk that it takes. Usually, this is expressed as a percentage of the exposure that is insured. The amount of the premium will depend on our assessment of the risk and, in some cases, on the requirements of our reinsurers. We do not usually ask for up-front fees; we rarely require commitment fees.

Annual payment
Typically, we invoice on an annual basis. Sometimes, it makes sense to invoice the premium up-front for the whole period, so that the premium can be included in the loan that funds the transaction.

Capacity
ATI has strong reinsurance treaties that enable us to take risks up to US$45 million without having to tap into the reinsurance market. However, through our risk management framework, we may face restrictions on our exposure for a specific country or off-taker. Any foreseeable issues will always be shared with our clients at every stage in a very transparent way.

For renewable energy projects, we have access to the Africa Energy Guarantee Fund, which significantly extends our capacity for renewable energy projects that are eligible under the SE4All initiative.

Environmental and social impact management
For larger transactions and longer tenors, ATI will always consider how the environmental and social impacts of a project have been evaluated and mitigated. We prefer projects that follow the IFC performance standards. We usually become involved after these studies have been concluded, and our main role is to validate the work that has already been done. As such, this should not cause any additional delays in the underwriting.

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