Munich Re teams up with Government and KfW to encourage green technology

by Richard Kilner

Story link: Munich Re teams up with Government and KfW to encourage green technology

German reinsurer Munich Re has teamed up with the German Federal Ministry for the Environment and KfW Bankengruppe to launch a new credit programme designed to foster an increase in geothermal energy within Germany.

A combined total of €60m is to be made available for the sinking of deep geothermal wells, with the programme formulated to minimise associated productivity risks.

Although there is general support for green energy, each has its own Achilles’ heel to make investors think twice.

For geothermal energy, the large costs of drilling, with no guarantee of making a find, can scare off potential investors.

By coming together with a €60m scheme, the German Government, bank and reinsurer are hoping to encourage investors by reducing their productivity risks.

In addition to interest, one-off fees will be charged both when an application for a loan is made and when one is agreed upon.

However, those lent to will benefit from considerable assistance, including expert assessment of the geothermal area and technical support.

Munich Re has a longstanding interest in the environment, and in mid-February compiled a DVD, Globe of Natural Hazards, as an identification tool for the complex risks arising from natural hazards.

And in December last year the firm called for insurance to be included in the Copenhagen climate change agreement.