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New Energy Risk designs innovative performance insurance for Fulcrum

California-based New Energy Risk, a provider of customized insurance technology solutions for renewable energy projects, has provided Fulcrum BioEnergy, Inc., a company that turns municipal solid waste (MSW) into renewable transportation fuels, with tech performance insurance for it's Sierra BioFuels plant in Reno, Nevada. Once completed in 2020, the facility will have the annual capacity to process 175 000 tonnes of MSW into over 10 million gallons (≈ 38 million litres) of synthetic crude oil.

Phase one of Fulcrum BioEnergy’s Sierra BioFuels Plant project outside Reno, Nevada consists of a fuel processing facility (FPF). It was completed in 2016 and has been in operations since. It is strategically located adjacent to Waste Management’s Lockwood Regional Landfill, one of the largest landfills in the Western US. The FPF is also within close proximity to the Sierra Biorefinery to maximize supply chain logistics and reduce transportation costs (photo courtesy Fulcrum BioEnergy).

Caifornia-headed Fulcrum BioEnergy Inc., recently raised US$150 million in bond financing for the Sierra BioFuels project, and turned to New Energy Risk, an affiliate of global insurance major XL Catlin, to provide a performance insurance product to support the financing.

The insurance complemented Fulcrum’s patented technology, development team, and process, as well as feedstock and off-take strategies, in order to increase project attractiveness to investors. Fulcrum’s existing investors include US Renewables Group, Rustic Canyon Partners, United Airlines, Waste Management, Air BP, and Cathay Pacific.

The New Energy Risk technology performance insurance solution further strengthened our business model for the Sierra BioFuels Plant and was an important factor in financing this project. The New Energy Risk team worked closely with our engineering and technology teams to assess the technical aspects for our innovative project and were successful in creating an impactful and customized insurance product that provides significant risk mitigation for Fulcrum’s bondholders, said Eric Pryor, Vice President and Chief Financial Officer of Fulcrum BioEnergy.

New Energy Risk is a specialty insurance technology company that acts as an effective bridge between new technology innovators, insurers, and lenders. The company used a proprietary techno-economic model that synthesizes scientific understanding, engineering analysis, as well as the actuarial and financial expertise to assess the performance of Fulcrum’s technology and potential output of the Sierra BioFuels Plant.

After its extensive assessment of the MSW-to-fuels technology and process, New Energy Risk developed a custom solution, backed and provided by XL Catlin, to insure the performance of Fulcrum’s plant. The insurance program provides a significant technology risk mitigant for Sierra BioFuels Plant bondholders who have invested in the project.

We’re proud to have supported Fulcrum in their capital raise and are excited to see their leading-edge technology and process grow in both scope and impact – taking a true waste product and converting it into millions of gallons of clean transportation fuels and creating hundreds of jobs in the process. Fulcrum is showing what is possible in the waste-to-fuel space, and doing it at an unprecedented scale. We look forward to working with them on more projects in the years to come, said Tom Dickson, CEO of New Energy Risk.

About New Energy Risk and XL Catlin

Founded in 2010, New Energy Risk is a provider of innovative data analytics and technology performance risk transfer solutions to the new and renewable energy industry worldwide and pioneered the development of large-scale technology performance insurance. It was founded to provide complex risk assessment and serve as an effective bridge between clean-energy innovators and insurers and is part of XL Innovate, an insurance technology venture firm.

Since then, New Energy Risk has helped its customers gain over US$1 billion in financing for renewable energy and new technology deployments. XL Catlin is the global brand used by XL Group Ltd’s insurance and reinsurance companies which provide property, casualty, professional and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises throughout the world.

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