Hapag-Lloyd inks $889 million green financing for LNG-powered sextet

Germany’s Hapag-Lloyd said it has entered into its first green financing deals worth $889 million to fund its recently announced order for six ultra-large LNG-powered vessels.

The shipping firm said Monday it concluded two debut transactions according to the green loan principles of the London-based Loan Market Association. In addition, this has also been verified by classification society DNV GL as a secondary party opinion.

The package includes a syndicated loan of $417 million and lease financing of $472 million.

Furthermore, the syndicated green loan has a 12-year maturity and will go for the financing of three newbuilds. 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, Hapag-Lloyd said.

Moreover, the lease financing for the remaining three newbuildings has a maturity of 17 years plus construction-phase financing. The Industrial and Commercial Bank of China Leasing (ICBC Leasing) structured this financing.

“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,” said Mark Frese, chief financial officer of Hapag-Lloyd.

“The transactions will help us to modernise our fleet while further reducing our CO2 footprint at the same time,” he said.

The order for the 23,500+ TEU vessels at South Korea’s Daewoo Shipbuilding & Marine Engineering has a price tag of about $1 billion.

Volkswagen’s MAN Energy Solutions will provide six MAN B&W ME-GI main engines as part of a recently revealed deal.

Following delivery in 2023, Hapag-Lloyd will deploy the ships on the Europe – Far East routes as part of The Alliance, a shipping consortium consisting of the German liner, ONE, Yang Ming, and HMM.

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