Kita, a Lloyd’s of London coverholder known for risk transfer structures in emerging markets, has expanded its carbon insurance lineup with a new non-payment insurance policy aimed squarely at lenders financing carbon and natural capital projects.
The product lands as demand grows for financing tools that let credible climate and nature deals move past the talking stage and into execution.
Interest from banks and institutional investors in climate-linked assets keeps climbing. Deals, though, still freeze. Counterparty credit risk and the fear of non-payment block capital before it ever leaves the balance sheet.
Kita’s new policy targets that bottleneck directly, with the aim of loosening capital flows across global carbon and natural capital markets.
Kita structures specialist insurance solutions for transactions that standard financing tools don’t always handle well.
The company operates inside the Lloyd’s market and works with insurers, banks, and project developers to build coverage supporting trade finance, project finance, and sustainability-linked investment structures. Some of these deals get messy fast. That’s where Kita tends to step in.
The non-payment policy sits on Lloyd’s capacity led by MS Amlin, with support from Chaucer Group and Tokio Marine Kiln. The backing matters. Rated balance sheets still drive lender comfort, even in climate finance.
In April 2025, Kita has secured £22.5 mn in underwriting capacity for 2025 to cover carbon credit risks globally. The increase signals growing recognition of insurance as a tool to reduce risk in high-quality carbon projects.
The new capacity comes from Chaucer, Munich Re Specialty, RenaissanceRe, and Tokio Marine Kiln. Kita’s Managing Director of Insurance, James Kench, noted that these firms support the use of insurance in scaling carbon markets and recognise Kita’s expertise in carbon risk.
Coverage protects lenders against non-payment tied to project finance loans, prepayment facilities, offtake receivables, and other credit exposures linked to carbon and natural capital assets.
By transferring counterparty credit risk onto A-rated insurers, the policy reduces loss-given-default, supports regulatory capital relief for banks, and can, in some cases, lower funding costs for project sponsors.
The structure stays flexible. The policy can apply to pay-on-delivery and prepayment models, where receivables and working capital need de-risking, or to full project finance deals where wrapping counterparty exposure improves bankability.
It also works at portfolio level, covering aggregated exposures across multiple projects and jurisdictions, and can tie into sustainability milestones and verified delivery frameworks.
For project developers, access to non-payment insurance can shift conversations with lenders fast. Projects that stall over counterparty concerns may suddenly clear internal credit hurdles.
By moving risk onto an insurer’s balance sheet, lenders and buyers often price deals more cleanly and approve them faster. Typical use cases include pre-financing against contracted offtakes, working capital for scale-up, and improved lending terms for large infrastructure builds. Not glamorous. Effective.
The launch follows a stretch of rapid expansion at Kita.
The company reports a 450% jump in underwriting capacity, broader coverage for additional project types such as Soil Organic Carbon, and an extension of its non-delivery insurance to address both supply-side and demand-side risks.
Louise Scott, political risk underwriter at MS Amlin, said the firm’s role as lead capacity provider reflects its view that insurers can unlock capital for climate and nature initiatives.
She pointed to counterparty credit risk as a recurring reason projects stall and framed the policy as a way for banks to deploy capital with more confidence, especially in emerging markets.
We’re proud to be the lead capacity provider, which reflects our belief in the role insurers can play in unlocking capital for climate and nature -based initiatives, an area we’ve made significant inroads into, recently.
Louise Scott, MS Amlin political risk underwriter
“The transition to a low carbon economy depends on the ability to finance credible projects and grow them at scale – yet many stall due to counterparty credit risk. This solution helps overcome that challenge and enables banks to deploy capital with greater confidence, especially in emerging markets,” Louise Scott said.
James Kench, managing director of insurance at Kita, said financing the transition requires bankable risk transfer, not just intent.
He described non-payment insurance as a tool that moves counterparty risk onto regulated balance sheets, allowing lenders and buyers to fund credible projects at scale rather than leaving them stuck in pipelines.
Financing the transition needs more than good intentions – it needs bankable risk transfer. Non-Payment Insurance gives banks and investors the confidence to fund credible carbon and nature projects at scale.
James Kench CFA, Kita managing director
“By moving counterparty risk onto a strong, regulated balance sheet, Kita’s NPI can offer lenders and buyers the protection they need to unlock capital and move projects from pipeline to real-world impact,” James Kench says.
Alek Pillay, Kita’s head of underwriting, added that non-payment insurance has supported banking activity across markets for years, often as a condition for deal completion.
With capacity led by MS Amlin, he said Kita aims to bring those mechanics into carbon and natural capital finance to help the sector scale without blowing through risk limits.
