By: Matthew George - Account Manager at Hamtern Financial Services

Project delays in renewable energy tend to get written off as timing issues. The International Energy Agency’s (IEA) Renewables 2025 report is already more cautious than the previous year’s outlook, with its 2025 to 2030 forecast revised down by 5%, partly because of regulatory shifts. Whether it is a shipment running late or a contractor falling behind, something invariably slips. Then it starts to affect everything else, funding timelines, insurance, and, in some cases, whether the project still makes sense.

On most projects, there is constant pressure to keep things moving. Funding has deadlines attached to it. Equipment does not always arrive when expected. What looked straightforward during planning starts to shift once construction is underway. In that environment, insurance is often treated as a mere requirement to move the project forward and is seldom unpacked in detail, yet it is expected to respond as if nothing has changed, even as the project's risk profile evolves.

Renewable energy projects are exposed to timing and environmental risk

Renewable energy projects are not fundamentally different from other large-scale construction projects in terms of the types of risks they face. However, what changes things is the environment these projects sit in. Most of them are funded. That funding comes with conditions. Lenders require all aspects of the project to be properly lined up, including the insurance. Only then do they release the capital. That puts pressure on timing, but also on how early these conversations need to happen. Insurance is not just something you add on once everything else is in place. It sits inside the funding process, whether people like it or not.

Having worked across wind, solar photovoltaic and hydro projects focused on lender-financed construction projects representing more than 3 gigawatts of renewable energy assets across South Africa and the broader region, I have seen how quickly insurance becomes part of the critical path to financial close. My work in renewables began during the Renewable Energy Independent Power Producer Procurement Programme Bid Window 2, giving me a long view of how the South African market has matured across wind, solar photovoltaic, and hydro projects. Lenders, sponsors, contractors, and operations teams all need confidence that the insurance programme reflects the project’s commercial, technical, and contractual realities from design and construction through to handover and operations.

Geopolitical uncertainty is impacting project timelines

That experience has shown me that a delay is rarely caused by just one thing. Delays can result from a range of factors. You see it in supply chain disruptions, extended shipping timelines, and material shortages, all of which have become more pronounced in recent years. Recent geopolitical issues have added another layer of uncertainty. This is especially the case where equipment and components are sourced across multiple regions. These pressures do not always stop a project, but they do stretch it. And that stretch introduces new risks.

Mid-project changes are demanding more agile processes

Delay is not one thing you can point to. It tends to unravel in pieces. You see it when equipment arrives late, or when something in transit does not arrive when it was meant to. The project slows down, and the assumption is that the insurance will absorb that impact. In practice, it does not work like that.

Cover only responds to very specific events. In most cases, there needs to be a physical loss or damage event to trigger a claim under a Delay in Start Up (DSU) or Loss of Profits policy.

That is where the misunderstanding often happens. A project can be delayed for many reasons, such as supply chain disruptions, geopolitical tensions, or conflicts affecting shipping routes. However, unless a specific non-damage extension applies, if there is no insured physical damage, the delay usually falls outside the policy.  For example, a war-related delay would not trigger a marine DSU claim unless specific War Cover was arranged upfront.

This is where experienced advice matters. The issue is not only whether the policy exists, but whether the project team understands what it will and will not do. If a delay is uninsurable, that needs to be identified early so the gap can be managed commercially, contractually, or operationally. If an extension is available, it should be considered before the problem arises, not after the project has already slipped. At the same time, policy continuity becomes a consideration. If a project timeline changes, the insurance programme needs to adapt accordingly.

Cost pressures continue to drive project risk

There is also the question of cost. Delay can increase exposure, extend indemnity periods, and shift the project's overall risk profile. Not all of these consequences are recoverable through insurance. Some remain within the project execution risk.

Insurance cannot be approached as a static line item. It needs to be part of the project conversation early, alongside financing, procurement, and delivery planning. The real value lies in structuring cover to reflect how the project is expected to evolve, including where it may come under pressure.

Renewable energy continues to attract significant investment, particularly in developing markets. With that investment comes opportunity but also complexity. Projects are larger, supply chains are more fragmented, and delivery environments are less predictable.

In that context, delay is not an exception. It is a probability. The question is not whether projects will experience pressure. It is whether the insurance and financing structures have been designed with that pressure in mind. Because when delay does occur, the impact is rarely limited to time. It is felt across the entire project structure.