KfW IPEX-Bank supports Hapag-Lloyd’s LNG-powered ULCV project with green loan
German container shipping major Hapag-Lloyd has secured from compatriot KfW IPEX-Bank its second green loan within six months aimed at financing the construction of six LNG-powered ultra large container vessels (ULCVs).
Together with nine other banks, KfW IPEX-Bank is contributing debt capital of $852 million.
In this context, KfW IPEX-Bank said it has assumed the role of global coordinator and lead arranger together with BNP Paribas for the syndicated green loan.
The vessels, each with a capacity of around 23,500 standard containers (TEU), are scheduled to be delivered starting in 2024 and are dual-fuel ships able to run on liquefied natural gas (LNG). All six ships will be built by South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME).
“With this financing, we are helping our long-standing customer Hapag-Lloyd with its transition to ‘green’ shipping,” Andreas Ufer, member of the Management Board of KfW IPEX-Bank, said.
“A Green Loan was possible because Hapag-Lloyd is using the loan funds exclusively for the project, which has been clearly defined by set criteria – operating the ships with LNG will significantly reduce carbon emissions, marking a clear improvement on the current standard.”
“Scaling up the net zero transition requires a mobilisation of sustainable finance tools across the whole economy. This latest Green Loan with Hapag-Lloyd demonstrates a progressive approach to decarbonising the shipping sector, which is a critical industry to support in reducing global emissions,” Lutz Diederichs, CEO BNP Paribas Germany, said.
With MAN Energy Solutions – which is supplying the engines – and DNV GL, two members of the German Maritime Export Initiative (GeMaX) are also on board. With their fuel-efficient dual-fuel engines from MAN, the newbuildings will not only cut CO2 emissions by around a quarter compared with conventional drives but also reduce sulphur dioxide and particulate matter by more than 90 per cent thanks to LNG.
As informed, the financing runs for 12 years from the date of delivery and the credit facility is secured by Korea Trade Insurance Corporation (K-SURE).
The financing provided by a consortium led by KfW IPEX-Bank and BNP Paribas is enabling Hapag-Lloyd to modernise its fleet of around 240 operated ships. The shipping company had already ordered vessels of the same size at the end of 2020.