GCMD: Vessel retrofit fund using pay-as-you-save repayment mechanism closes at $35M

The Global Centre for Maritime Decarbonisation (GCMD) and partners have closed the world’s first fund for vessel retrofits with a pay-as-you-save repayment mechanism, securing total commitments of up to $35 million and exceeding its initial target.

The Fund for Energy Efficiency Technologies (FEET) offers up to 100% upfront financing for retrofits and introduces a pay-as-you-save repayment mechanism, directly linked to verified fuel and regulatory savings.

Aiming to address the long-standing financial barriers hindering the sector’s uptake of vessel retrofits, this fund has drawn strong interest from across the maritime value chain, including equipment manufacturers, shipowners, and investors, GCMD said.

GCMD provides catalytic equity and is FEET’s appointed decarbonization advisor, while AIM Horizon Investments manages the fund.

FEET uses a pay-as-you-save repayment mechanism to address payback uncertainty with energy efficiency technologies (EETs), such as wind-assisted propulsion systems and air lubrication systems, by directly linking repayment to quantified and verified fuel and regulatory savings.

Deploying this mechanism requires robust data collection and analysis to isolate the retrofit’s contribution to overall fuel savings, and GCMD has undertaken EET performance pilots, equipping vessels with additional sensors to acquire high-precision, high-resolution data and applying rigorous data analytics to quantify fuel savings with statistical confidence.

According to the Centre, FEET is designed to scale beyond this initial closing, targeting $500 million by 2030, which will be capable of supporting around 200 ships.

Lynn Loo, CEO of GCMD, said: “Bringing FEET to life has taken persistence and a willingness from everyone involved to step into the unknown. There was no playbook; our teams were learning as we went. This is exactly the kind of collaborative, problem-solving mindset needed to move the needle on maritime decarbonisation. My hope is that FEET will accelerate the uptake of shipboard energy efficiency solutions and help unlock the scale of action needed to turn the industry’s decarbonisation ambition into tangible progress.”

Michiel Muller, Partner AIM Horizon & FPG AIM, added: “We are proud to work in this partnership and bring an innovative financial product for maritime decarbonisation. It has taken a huge collective effort to create a solution that immediately reduces carbon emissions and has competitive economics that will enable it to really scale. In GCMD we have found a like-minded partner whose professional and scientific approach impressed us since the start, and it was an opportunity to further expand our long-standing relationships with DBJ, ING and DBS Bank.”