Credit and political risk broker BPL Global has partnered with carriers including Liberty Specialty Markets (LSM), Ascot and Aspen on the launch of a new company that will guarantee climate bonds issued on the London Stock Exchange.

Stock Exchange and climate

BPL Global will serve as broker for the Green Guarantee Company (GGC), set to launch in 2022, with the company founded by the Development Guarantee Group, which is backed by incubator and fund manager Carbano Development and led by co-founders Boo Hock Khoo, Jean-Pierre Sweerts and Lasitha Perera. 

The Development Guarantee Group describes itself as “the world’s first dedicated guarantee platform with the mission to design, develop and operate guarantee solutions and companies that can effectively mobilise private sector capital towards funding development and sustainability challenges”. 

Sovereign Risk Insurance and LSM will serve as lead insurance partners for GGC, with Ascot and Aspen also serving as insurance partners for the new entity. 

Khoo said the ambition of the GCC was to “become a champion for mobilising and crowding-in global capital market players into providing the climate finance urgently needed to help developing countries address the climate change challenge.  

“The insurance industry represents a global capital pool of more than $30trn and therefore will be a key strategic partner to the Green Guarantee Company, both as an investor in the climate bonds that it will guarantee and as a risk-sharing partner through the private credit insurance market.” 

The new company is set to launch operations next year and will guarantee climate bonds issued on the London Stock Exchange followed by other exchanges in the world’s major global debt capital markets. 

The new entity said it will also seek to syndicate its insured portfolio exposures to unlock new pools of capital and to build an ecosystem that mobilises climate finance into the countries that need it most. 

Gregory King-Underwood, director of global portfolio solutions and reinsurance at BPL Global said the GGC will enable sustainable projects from emerging markets to access a much wider pool of investors. 

“To date, BPL Global has been engaging with the credit and political risk insurance market to support this exciting new development. Moving forwards, we will be working alongside the GGC to navigate and overcome the complex insurance challenges of the partner projects.”