A new Dutch finance company founded by experienced investors is backing shipowners' efforts to decarbonise their fleet.
Amsterdam-based Prow Capital is launching a €420m ($472m) private debt fund to help fill the gap left by the retreat of traditional lending banks from shipping.
The company has been set up by a group of "seasoned" investment professionals led by Global Ship Lease board member Menno van Lacum.
He said: "We are driven by the scale of the impact we can make.
"Against a backdrop of worldwide deleveraging, retrenchment of sector banks and increasing international urgency to tackle climate change, we are providing a new approach to ship financing, working collaboratively to deliver green deals."
Funding has been structured and arranged in close cooperation with Spanish lender Banco Santander and supported by financial services group FPG AIM.
Prow said tighter lending requirements have made traditional sources of finance increasingly difficult to access, at a time when shipping needs significant investment to accelerate its transition to zero emissions.
Cash is also needed to fund the growing fleet capacity required to transport the world's goods, the company believes.
Prow's Green Shipping Fund will provide loans for new and existing vessels or retrofits that comply with environmental, social and governance criteria and that lower emissions to meet International Maritime Organisation decarbonisation targets.
To qualify for financing, vessels must outperform relevant emissions regulations.
With an average loan size of €15m to €50m and strict eligibility criteria, the fund provides competitively priced pre and post-delivery senior secured debt financing, Prow added.
The company will "transparently" report independently validated CO2, NOx, SOx and particulate matter emissions reductions.
Deepsea and shortsea owners in Europe are eligible for the loans.
Vessels to be financed include those fuelled by LNG, LPG, methanol and hydrogen, as well as fully electric or hybrid ships.
"Our Green Shipping Fund provides debt finance for the next generation of ships for the blue economy," Prow said.
"We support shipowners on their journey to make zero emissions shipping a reality. Partners for the long term, we provide a new approach to ship financing."
Prow has promised "returns with impact" for investors.
Van Lacum has more than 20 years of experience in transport finance with MeesPierson, Fortis Bank and Transportation Capital Group in the US and the Netherlands.
The management team includes Maarten Schipper, an alumnus of the same companies, and Jeroen Meinders, a founding partner of e3 partners BV and a fund manager of the Amsterdam Climate Fund and Frysian Sustainable Energy.
Shipowners keen on the fund
Investment management is overseen by Gust Biesbroeck, with more than three decades of experience in the Netherlands, Greece and Hong Kong.
He has previously served as global head and managing director of transport clients for Dutch lender ABN Amro.
The fund is looking to recruit two more experienced ship finance experts.
Prow was founded in 2020 and is a member of the Getting to Zero coalition.
Banco Santander's head of corporate & investment banking, Niels Ackerman, said: "Supporting and driving initiatives that strongly contribute to the energy transition is a key strategic pillar for Santander.
"We're delighted to work together with Prow and their stakeholders on this important transaction and it underlines our commitment to support our clients in the Netherlands as we build out our local presence."
The Royal Association of Netherlands Shipowners' (KVNR) managing director Annet Koster welcomed the initiative.
"Shipowners are increasing their sustainability efforts to reduce greenhouse gas emissions of their fleets, but they need more access to finance. Not only in the Netherlands, but across Europe," she said.
"Alternative finance is needed to accelerate and reach climate goals. Prow Capital entering the market offers just that."
