German liner company Hapag-Lloyd has concluded two green financial deals worth a total of $889 million.
The financing will be used for six ultra-large 23,500 TEU container ships, which were ordered in December 2020.
The company said that the two deals include debut transactions according to the Green Loan Principles of the Loan Market Association (LMA).
The syndicated green loan worth $417 million has a 12-year maturity and will be used to finance three of the six container ships on order.
The credit facility is being backed by the Korea Trade Insurance Corporation (K-SURE), and the syndicate consists of 11 banks. KfW IPEX-Bank and BNP Paribas were in charge of structuring and coordinating the transaction.
The lease financing for the remaining three newbuildings is worth $472 million, has a maturity of 17 years plus construction-phase financing, and has been structured by the Industrial and Commercial Bank of China Leasing (ICBC 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. The transactions will help us to modernise our fleet while further reducing our CO2 footprint at the same time,” said Mark Frese, Chief Financial Officer of Hapag-Lloyd.
The six ultra-large container vessels are being built by Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME).
The vessels will be fitted with fuel-efficient high-pressure dual-fuel engines, that will operate on LNG, but they will have alternatively sufficient tank capacity to operate on conventional fuel.
The $ 1 billion investment will see the LNG-powered 23,500+ TEU vessels delivered to Hapag-Lloyd between April and December 2023.