contribute EUR 150m to the scheme. It is to encourage the promotion and delivery of
sustainable and green projects in the maritime transport sector. It is available to both
EU based operators as well as non-EU undertakings with substantial interests in the
EU.
2 Indeed, this builds on a successful green ship finance pilot between the EIB and
financial institutions in France, the Netherlands and Nordic countries, and involved
the delivery of the EIB’s 750 million euro Green Shipping Guarantee (GSG)
programme back in 2017. One of the projects concerned an agreement between
the EIB and Societe Generale whereby Brittany Ferries was successfully financed to
build and purchase a liquefied natural gas powered ferry, “Honfleur”, the company’s
very first such vessel. It is scheduled to enter into service in April 2019 on the CaenOuistreham (France) and Portsmouth (UK) route. Societe Generale acted as the main
arranger
3 of the €142.6 million financing for the acquisition of the Honfleur ferry
commissioned by Brittany Ferries, which includes a tranche of €49.5 million fully
guaranteed by the EIB.
4
Qualifying projects can range from retrofitting ships which is increasingly seen as
important in delivering the emissions controls imposed by the International Maritime
Organization (IMO),
5 for instance, to the construction of new vessels which meet the
increasing regulatory standards on emissions, pollution and safety. It is inescapable
to the casual observer that the IMO has amended its regulations on emissions, ballast
water discharge, and ship design. These developments have meant that many fleets
are having to undergo change, and those changes require adequate financing. The
issue thus, of course, is access to finance in the current environment of a crunching of
credit, with newly imposed rules on capital adequacy, responsible lending and
financial innovation.
An innovation of this EIB/ING financing facility is that it does not treat inland
and ocean going operators differently. That is consistent with the recognition by the
2 Ibid.
3 As arranger, that entails bringing together various investors/financers.
4 See Societe Generale’s press release at https://www.societegenerale.com/en/newsroom/
The-European-Investment-Bank-Societe-Generale-and-Brittany-Ferries-successfully-sign-firstgreen-financing-in-the-maritime-transport-sector.
5 See regulations introduced under the auspices of Annex VI to the International Convention for the
Prevention of Pollution from Ships (MARPOL Convention); Until 31 December 2019, for ships
operating outside Emission Control Areas, the limit for sulphur content of ships’ fuel oil is 3.50%
m/m (mass by mass). The 0.50% m/m limit will apply on and after 1 January 2020, as decided by
the IMO’s Marine Environment Protection Committee (MEPC 70) in October 2016. The IMO
advises that “an increasing number of ships are also using gas as a fuel as when ignited it leads to
negligible sulphur oxide emissions. This has been recognised in the development by IMO of the
International Code for Ships using Gases and other Low Flashpoint Fuels (the IGF Code), which
was adopted in 2015. Another alternative fuel is methanol which is being used on some short sea
services. Ships may also meet the SOx emission requirements by using approved equivalent
methods, such as exhaust gas cleaning systems or “scrubbers”, which “clean” the emissions before
they are released into the atmosphere. In this case, the equivalent arrangement must be approved by
the ship’s Administration (the flag State).” (page 2, IMO FAQ on the 2020 Global Sulphur Limit at
http://www.imo.org/en/MediaCentre/HotTopics/GHG/Documents/2020%20sulphur%20limit%
20FAQ%202018.pdf). Both options require extensive works to be carried out on vessels.
132
J. Chuah
sustainable and green projects in the maritime transport sector. It is available to both
EU based operators as well as non-EU undertakings with substantial interests in the
EU.
2 Indeed, this builds on a successful green ship finance pilot between the EIB and
financial institutions in France, the Netherlands and Nordic countries, and involved
the delivery of the EIB’s 750 million euro Green Shipping Guarantee (GSG)
programme back in 2017. One of the projects concerned an agreement between
the EIB and Societe Generale whereby Brittany Ferries was successfully financed to
build and purchase a liquefied natural gas powered ferry, “Honfleur”, the company’s
very first such vessel. It is scheduled to enter into service in April 2019 on the CaenOuistreham (France) and Portsmouth (UK) route. Societe Generale acted as the main
arranger
3 of the €142.6 million financing for the acquisition of the Honfleur ferry
commissioned by Brittany Ferries, which includes a tranche of €49.5 million fully
guaranteed by the EIB.
4
Qualifying projects can range from retrofitting ships which is increasingly seen as
important in delivering the emissions controls imposed by the International Maritime
Organization (IMO),
5 for instance, to the construction of new vessels which meet the
increasing regulatory standards on emissions, pollution and safety. It is inescapable
to the casual observer that the IMO has amended its regulations on emissions, ballast
water discharge, and ship design. These developments have meant that many fleets
are having to undergo change, and those changes require adequate financing. The
issue thus, of course, is access to finance in the current environment of a crunching of
credit, with newly imposed rules on capital adequacy, responsible lending and
financial innovation.
An innovation of this EIB/ING financing facility is that it does not treat inland
and ocean going operators differently. That is consistent with the recognition by the
2 Ibid.
3 As arranger, that entails bringing together various investors/financers.
4 See Societe Generale’s press release at https://www.societegenerale.com/en/newsroom/
The-European-Investment-Bank-Societe-Generale-and-Brittany-Ferries-successfully-sign-firstgreen-financing-in-the-maritime-transport-sector.
5 See regulations introduced under the auspices of Annex VI to the International Convention for the
Prevention of Pollution from Ships (MARPOL Convention); Until 31 December 2019, for ships
operating outside Emission Control Areas, the limit for sulphur content of ships’ fuel oil is 3.50%
m/m (mass by mass). The 0.50% m/m limit will apply on and after 1 January 2020, as decided by
the IMO’s Marine Environment Protection Committee (MEPC 70) in October 2016. The IMO
advises that “an increasing number of ships are also using gas as a fuel as when ignited it leads to
negligible sulphur oxide emissions. This has been recognised in the development by IMO of the
International Code for Ships using Gases and other Low Flashpoint Fuels (the IGF Code), which
was adopted in 2015. Another alternative fuel is methanol which is being used on some short sea
services. Ships may also meet the SOx emission requirements by using approved equivalent
methods, such as exhaust gas cleaning systems or “scrubbers”, which “clean” the emissions before
they are released into the atmosphere. In this case, the equivalent arrangement must be approved by
the ship’s Administration (the flag State).” (page 2, IMO FAQ on the 2020 Global Sulphur Limit at
http://www.imo.org/en/MediaCentre/HotTopics/GHG/Documents/2020%20sulphur%20limit%
20FAQ%202018.pdf). Both options require extensive works to be carried out on vessels.
132
J. Chuah