Japanese shipping company Mitsui O.S.K. Lines (MOL) has decided to raise funds through a syndicated transition-linked loan using the performance-based interest subsidy system based on Japan’s Act on Strengthening Industrial Competitiveness.
The subsidy system is part of the financial support program to promote transitions towards carbon neutrality under the jurisdiction of Japan’s Ministry of Economy.
The Minister of Land, Infrastructure, Transport and Tourism approved MOL’s business adaptation plan on March 28. MOL is the first Japanese shipping company to make use of this system.
This loan is the seventh round of financing using the Sustainable Finance Framework MOL established in January of this year. The company will address environmental issues along with its stakeholders by continuously implementing sustainable finance and accelerating environmental investments based on this framework in future fundraising as well.
In addition, it obtained a second-party opinion on the eligibility of the Framework from DNV Business Assurance Japan on December 22, 2023, to ensure the eligibility and transparency of the framework.
The MOL Group has positioned environmental strategy as a key element of its group management plan BLUE ACTION 2035 presented last year, and has set “conservation for marine and global environment” as one of its Sustainability Issues (Materiality). The group is committed to solving environmental issues through co-creation with stakeholders to achieve “ net zero greenhouse gas (GHG) emissions by 2050″ .
Earlier this month, MOL signed a deal with Sumitomo Mitsui Trust Bank to raise funds through transition-linked loan financing for the construction of a new dual-fuel very large crude carrier (VLCC).
The shipowner has decided to apply for the funds to finance the construction of the VLCC, powered by liquefied natural gas (LNG), to support decarbonization efforts.