FG.de insurance concept pays off: Geothermal projects with exploration risk insurance cover are a popular bond for investors
Anton Berger of the consulting firm Rödl & Partner notes in an article in the newspaper "Stuttgarter Zeitung" that there is more than enough potenial investment money at the moment. In particular, geothermal drillings are in demand on a local and thereby manageable scale. The exploration risk insurance covers for deep geothermal projects of Munich Re are enjoying a strongly growing demand. This is what the newspaper "Stuttgarter Zeitung" describes in an article of 5 July 2012. "We experienced a surge", Matthias Tönnis, geologist and geothermal specialist at Munich Re, is quoted. The number of enquiries meanwhile increased to more than 100 projects, especially for sites in Germany and the USA. Currently, there are exploration risk insurance policies in Germany for projects in Taufkirchen, Traunreut and Geretsried-Wolfratshausen. A fourth policy already exists for a project in Denmark and in the USA another one is close to completion. The first such insurance was developed in 2003 for a project in Unterhaching. As in all projects thermal water in sufficient quantity and temperature has been found, none of the policies matured so far.
According to Munich Re, "the investors are currently standing in line", among other things because insured geothermal drillings are a high-yield and safe investment compared to some government bonds.
For several years now, the insurance company Munich Re as well as the kfW Group of Banks have been offering insurance solutions for deep geothermal projects that cover the so-called "exploration risk". This includes the risk of e.g. not finding thermal water in sufficient quantity or temperature in the subsurface after drilling at the site as it would be necessary for the project implementation. Thereby, the high investments already made especially in the drilling would be lost for the investors. This is why the exploration risk often constitutes an obstacle to find financiers for deep geothermal projects. Corresponding insurance solutions are therefore very important for the further development of using deep geothermal heat.
(Source: Stuttgarter Zeitung from 5 July 2012, German Geothermal Association GtV-BV)
Since the beginning, the FG.de Group of Companies also relies on a successful concept with the relevant insurances. Besides taking out policies for all drilling insurances like e.g. concerning the exploration risk or an interruption of operation, FG.de makes sure that even the insurance premium itself as well as the initial costs of the project are covered by a major German insurance company.