P50 Risk Solutions Lab Instrument Analysis

The P50 Risk Solutions report concludes that a weather-index insurance product designed to hedge wind volume risk is not commercially viable in India. The cost of premiums outweighs the potential reductions in interest rates or improvements in debt-equity ratios. Furthermore, the instrument fails to attract new institutional capital because the financial instability of state-owned power off-takers (DISCOMs) is a far more significant risk to credit ratings than weather variability.

• The P50 Risk Solutions instrument is not commercially viable for reducing financing costs, as the cost of the insurance exceeds the financial benefits it provides. Cost-benefit analysis across six impact scenarios for standalone projects and an optimistic scenario for portfolios showed that the levelized cost of electricity (LCOE) for insured projects was higher than in business-as-usual (BAU) scenarios, resulting in negative net annual savings.
• The instrument is unlikely to attract new institutional investors or bond market capital in the short term because wind variability risk is considered secondary to the risk of delayed payments from state public electric distribution companies (DISCOMs). Mitigating wind variability would only increase credit ratings by a maximum of one level, which is insufficient to reach the AA rating typically required by institutional mandates.

APA

Atal, V., Jena, L. P., & Shrimali, G. (2016). P50 Risk Solutions Lab Instrument Analysis. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/12/P50-Risk-Solutions_full-report.pdf

Chicago

Atal, Vinit, Labanya Prakash Jena, and Gireesh Shrimali. P50 Risk Solutions Lab Instrument Analysis. Climate Policy Initiative, 2016. https://www.climatepolicyinitiative.org/wp-content/uploads/2016/12/P50-Risk-Solutions_full-report.pdf.

Wikipedia

{{cite report |last1=Atal |first1=Vinit |last2=Jena |first2=Labanya Prakash |last3=Shrimali |first3=Gireesh |title=P50 Risk Solutions Lab Instrument Analysis |publisher=Climate Policy Initiative |date=October 2016 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2016/12/P50-Risk-Solutions_full-report.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{atal2016p50, author = {Atal, Vinit and Jena, Labanya Prakash and Shrimali, Gireesh}, title = {{P50 Risk Solutions Lab Instrument Analysis}}, institution = {Climate Policy Initiative}, year = {2016}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2016/12/P50-Risk-Solutions_full-report.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }