OPIC is to provide a loan of US$4.3M to help build the 5MW project. It will also provide US$1.4M in reinsurance for Zurich’s political risk cover for the plant, which is to be developed in south central Sri Lanka.

Zurich said that the political risk cover for the project, being developed by a US firm, is in line with its recently-launched climate initiative.

Earlier this month, OPIC said it plans to back more renewable energy projects, including small hydro. It has issued a call for proposals that will result in up to US$500M in private equity investments funds to for companies or projects. OPIC plans a competitive process to select fund managers with the best strategies to identify suitable projects.