Risk Transfer – Upstream Risk Product Modelling and Transaction Support at FSD Africa

Capacity Building for Insurers:
Curriculum Development:

• Building on the existing curriculum, deliver a capacity-building program tailored to insurers and reinsurers, focusing on geothermal exploration underwriting. The program will be adapted and refined based on feedback from insurers, Independent Power
• Producers (IPPs), and investors, ensuring it addresses emerging needs and incorporates practical insights.
• Modules will include the technical aspects of geothermal energy projects, risk analysis/modelling, financial exposure, and international best practices, among other relevant topics.

Training Delivery:

• Conduct a series of in-depth training sessions (virtual or in-person) for insurers and reinsurers, with particular emphasis on risk evaluation and underwriting practices specific to geothermal exploration.
• Provide practical case studies from other geothermal exploration projects globally to illustrate challenges, risk mitigation, and potential underwriting strategies.

Follow-up and Mentoring:

• Offer ongoing mentorship and support for a selected group of insurers and reinsurers over a 6-month period post-training, addressing any questions or issues that may arise during insurance policy approval processes, quotation drafting etc.
• Support for Quoting the First Two Transactions:

Transaction Review:

• Work closely with the participating insurers and reinsurers to review the details of the first two geothermal projects under consideration for insurance coverage.
• Analyse the risk profiles of these projects and engage with the geothermal project developers, ensuring that all relevant information and documentation are gathered for underwriting purposes.

Quoting Process:

• Provide hands-on support to insurers in preparing quotes for these two projects, including assessing premium rates, identifying exclusions, and proposing policy terms.
• Engage with project developers, investors, and reinsurers to ensure alignment on coverage terms and clarify any technical or financial aspects of the projects that may affect the underwriting process.

Stakeholder Engagement and Collaboration:

• Coordination with Key Stakeholders:
• Engage with FSD Africa, insurers, reinsurers, project developers, Ministry of Energy and Petroleum and brokers to foster collaboration and ensure all parties understand the scope and risks of the geothermal projects.
• Lead consultations with these stakeholders to address any concerns and facilitate discussions around risk allocation, pricing, and terms of coverage.

Reporting:

• Prepare detailed reports on each training session conducted, documenting key insights, challenges, and recommendations for further capacity building.
• Provide regular progress reports on the quoting process for the two transactions, outlining any issues encountered and how they were resolved.

Deliverables:

• Training Materials: Updated training materials and case studies on geothermal exploration underwriting.
• Training Sessions: Successful delivery of at least 2 structured training sessions for participating and prospective insurers.
• Mentoring and Capacity Building: Ongoing support to insurers for six months post-training.
• Quoting Support: Completion of the quoting process for the first two geothermal transactions.

Final Reports:

• A detailed report on the outcomes of the training.
• A report summarizing the process, challenges, and final quotations for the two geothermal transactions.
• Invitation to Submit Proposal assignment.
• For consulting firms an outline of team structure, including roles and responsibilities of team members.
• A summary of relevant experience for the assignment.
• A short description of your understanding of the role of the Consultant and the approach to be used as outlined in these Terms of Reference.
• A description of how you intend to fulfil the Services within the suggested timeline and confirmation of your ability to meet the timelines.
• An itemised budget for both professional fees and reimbursable expenses, including fee rates, number of days and a breakdown of expenses.

​​​​​​​Consultant Qualifications/Mandatory Requirements:

• Minimum of 5 years of experience in Geothermal Output insurance underwriting.
• Proven expertise in risk assessment, insurance product development, and policy structuring for large-scale energy projects.
• FSD Africa is inviting proposals from suitably qualified consultancy firms.