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Basak Pamir Ulgen
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IFC and Leading Reinsurance Firm Munich Re to Reduce Geothermal Exploration Risk in Turkey
Istanbul, Turkey, March 27, 2013
— IFC, a member of the World Bank Group, and international reinsurer Munich Re have agreed to develop and pilot geothermal exploration risk insurance in Turkey.
This is the first IFC project aimed at reducing the risks associated with geothermal energy exploration.
Under the agreement, IFC will work with Munich Re to identify geothermal projects that will use exploration risk insurance to reduce exposure to unproductive wells. Four pilot projects, funded by $420 million of private sector investment, are expected to add 140 megawatts of geothermal capacity.
“High exploration risk is one of the key barriers facing geothermal developers, in Turkey and around the world,” said Patrick Luternauer, IFC’s Regional Business Line Manager for Sustainable Business Advisory. “This innovative insurance instrument supported by IFC will drive further global investment in geothermal energy – a clean, renewable, base-load energy source – reducing greenhouse gas emissions and improving the country’s energy security.”
Ansgar West, head of Munich Re’s Financial & Entrepreneurial Risks unit said: “Deep geothermal heat is considered a very promising form of renewable energy. However, the substantial drilling and development costs associated with this technology often constitute a huge investment barrier because there is a certain risk of not making a find, in which case the investment is lost. With our expertise, we can assume renewable energy risks that are not everyday occurrences and thus help provide greater investment security.”
The project is funded by the Global Environment Facility (GEF) and follows an earlier engagement during which GEF funded the World Bank’s creation of a geothermal exploration risk guarantee for a project in Hungary.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
About Munich Re
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability, and client proximity. Our business model is based on the combination of primary insurance and reinsurance under one roof. We take on risks worldwide of every type and complexity, and our experience, financial strength, efficiency, and first-class service make us the first choice for all matters relating to risk. Our client relationships are built on trust and cooperation. In FY2012, the Munich Re Group achieved a profit of €3.2 billion on premium income of around €52 billion. It operates in all lines of insurance, with around 47,000 employees throughout the world.
The Global Environment Facility (GEF) was established in 1991 as the financial mechanism of the main multilateral environmental agreements. Currently, the GEF is the largest public funder worldwide of projects aiming to generate global environmental benefits, while supporting national sustainable development initiatives. For more information, visit
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