Norsepower, the developer of auxiliary ship wind-propulsion systems, is developing lease financing packages for vessel operators that would rather rent than buy its fuel-saving rotor sails.
Chief executive Tuomas Riski says an the annual fee for what he calls a "Technology as Service model" will cost about €200,000 per year for a two rotor sail installation.
It means owners can pay nothing upfront, he says, but start saving money straight away.
The sails typically cost about €1m to €2m for a two-rotor retrofit.
Fuel savings
Tests have generally shown independently rated fuel savings in the range of 6% to 10%, with a claimed potential of up to 20%.
Riski says Norsepower is looking to work with one or two financial partners “so we can make it as simple as possible for the end customer, and it is a turnkey delivery on this kind of technology”.
Instead of invoicing for the rotor sails and the installation we convert it into a long-term service agreement for the sails and their continuous maintenance. The yearly service fee is less than the fuel savings
“Instead of invoicing for the rotor sails and the installation we convert it into a long-term service agreement for the sails and their continuous maintenance. The yearly service fee is less than the fuel savings,” he says.
Norsepower is just about ready to start supplying the packages, Riski says. “We haven’t yet made deals based on the financing model, but we are actively marketing it and there is early interest. We have some dialogue with financing partners.
Service deals
“We are targeting a financing arrangement so that we could finance 100 service deals like this,” he adds.
Norsepower has just announced that it raised €3.6m from an equity financing round to drive expansion and growth plans. The funds will allow it to expand production of its rotor sails in Asia, and search for potential supplier partners within the region.
The financing round was conducted with Finnish investment firm Korkia, which partners disruptive growth companies. Existing investors subscribed to shares, but new investors formed the majority.
Since its establishment in November 2012, Norsepower has raised more than $15m in funding, most recently in the summer of 2016 from the European Commission, and the Finnish government’s funding agency for innovation, Tekes.
Norsepower’s rotor sail solutions are a modernised version of the Flettner rotor, a spinning cylinder that uses the Magnus effect to harness wind energy and propel ships.
