MOL seals Japan’s first sustainability-linked lease deal

MOL Chemical Tankers, a group company of Japanese shipping major Mitsui O.S.K. Lines (MOL), has signed Japan’s first sustainability-linked lease agreement with compatriot Tokyo Century Corporation for chemical tanker Bonita Ana.

Bonita Ana. Courtesy of MOL

The deal is part of MOL’s environmental strategy which was deemed as contributing to initiatives to address sustainability issues, leading to the conclusion of the lease agreement.

The agreement sets sustainability performance targets that are consistent with the company’s environmental strategy, and lease payments are reduced in accordance with the achievement of these targets, MOL explained.

Tokyo Century has established Japan’s first “Sustainability Linked Finance and Transition Linked Finance Framework” intending to offer support under a Japanese Operating Lease with Call Option (JOLCO). The lease agreement for Bonita Ana is the first project to utilize the framework.

According to VesselsValue data, the vessel was ordered in 2021 and was built by Japanese shipyard Shitanoe Zosen. The 136-meter-long Bonita Ana has a capacity of 16,000 cubic meters.

MOL was also the first Japanese shipping company to make use of the financial support program to promote transitions towards carbon neutrality under the jurisdiction of Japan’s Ministry of Economy.

Earlier this year, the company 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.

In March, MOL Chemical Tankers completed the acquisition of all shares of Fairfield Chemical Carriers (FCC), a chemical tanker service company based in the U.S. The acquisition enables MOL Chemical Tankers to integrate its fleet of 81 multi-segregated chemical tankers with stainless steel tanks with 36 vessels owned by FCC, making it one of the largest such fleets in the world.

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