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World - 'Groundbreaking' Green Financing Fuels LNG-Powered Box Ships

Hapag-Lloyd will use nearly US$1Bn in ‘green loan’ financing to build six 23,500- TEU+, LNG-fuelled box ships, while Seaspan orders 10 dual-fuel ULCSs for Zim long-term charter

German shipping giant Hapag-Lloyd’s order for six 23,500-TEU+ ultra-large container ships (ULCSs) will not only push the capacity boundaries of its largest ships, but also break new ground in financing. Hapag-Lloyd reported concluding two debut transactions according to the Green Loan Principles of the Loan Market Association (LMA), which was verified independently by DNV GL.

The syndicated green loan of US$417M has a 12-year maturity and will be used to finance three of the six ULCSs on order at South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME). The credit facility is being backed by the Korea Trade Insurance Corporation, and the syndicate consists of 11 banks. KfW IPEX-Bank and BNP Paribas were in charge of structuring and co-ordinating the transaction.

The lease financing for the remaining three newbuildings is US$472M, has a maturity of 17 years plus construction-phase financing, and has been structured by the Industrial and Commercial Bank of China Leasing.
“Our first green financings are a major milestone for us, as we are breaking new ground in the container shipping segment by financing newbuilding projects geared towards sustainability,” says Hapag-Lloyd chief financial officer Mark Frese.

“The transactions will help us to modernise our fleet while further reducing our CO2 footprint,” says Mr Frese.

Each of the new ULCS vessels will be fitted with a two-stroke, high-pressure, Diesel-cycle dual-fuel MAN B&W 11G95ME-GI Mk10.5 engine that will be capable of operating on LNG or traditional compliant fuel.

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