Helping shipowners to decarbonise is a “top priority” for the ship finance industry, a top banker told the TradeWinds Shipowners Forum Singapore 2023.
“We have got to commit to financing net zero activities by 2050,” said Pierre Carassus, director and co-head of maritime industries Asia Pacific, of Societe Generale.
“This is more than an ambition. It is a contract, it is a target. We need to deliver, we need to make it, otherwise, we can get sued or at the very least criticised by civil society,” he said.
Meanwhile, German export credit giant KfW IPEX-Bank is confident that there will be sufficient funds for shipowners to finance retrofits of green technology.
“I am quite confident that there will be enough money for retrofit financing,” Stephan Vetter, the bank’s vice president maritime debt origination and structuring for Asia Pacific, told forum delegates.
“The export credit agencies are very motivated to support their suppliers, especially with new technologies to maybe support the market-leading suppliers in the specialist fields,” he said, citing the example of scrubber financing in the run-up to IMO 2020.
“The good thing about the scrubbers and the IMO 2020 was that we developed structures to finance retrofits, by working together with the ECAs for example.”
Vetter said retrofitting was “a very good option” for smaller shipowners looking to make their existing fleet more efficient rather than go for newbuildings.
“For medium-sized shipowners, they don’t want to take the risk to go for new dual-fuel engines because they are really expensive and when they get their vessels in 2026/27 and they don’t know if that was the right decision,” he said.
The forum also heard that The Baltic Exchange is working on developing a new suite of indices targeted at people in the finance sector, such as banks or private equity.
“We do recognise that the Baltic Exchange has traditionally been very much focused on the trading and chartering level and has not been actively looking at the finance sector,” Mark Jackson, chief executive of the Baltic Exchange told the forum.
“But this is changing, and we are just in the process of creating a suite of indices that has a newbuilding price, a secondhand price, spot, and long-term period income and one for running costs.
“What we are trying to do is create very simple metrics and try to provide a little transparency into the investment into our [shipping] markets,” he added.