Klaveness Combination Carriers (KCC) has secured what it says is the first sustainability-linked bank financing in conventional Norwegian shipping.
The Oslo-listed owner of vessels that can carry both tanker and bulker cargoes is borrowing $60m to fund the seventh and eighth in its series of 83,500-dwt Cleanbu newbuildings due out from Jiangsu New Yangzijiang Shipbuilding in China in 2021.
The sustainability-linked term loan and revolving credit facility involved Nordea as coordinator and bookrunner and Credit Agricole CIB as sustainability agent.
External audit
The credit margin will be adjusted up or down based on KCC’s eco-performance.
This is defined as its ability to meet its goal of reducing CO2 emissions per ton of transported cargo per nautical mile (EEOI) and reducing absolute CO2 emissions per vessel.
KCC’s ambition is to be carbon neutral by 2030.
And it wants to reduce emissions per vessel by 15% from 2018 to 2022.
Its performance will be subject to an annual external audit.
The ability to carry both wet and dry cargoes with minimum ballast allows KCC to emit 40% less CO2 per transported tonne than standard vessels, it said.
The future of finance?
"We strongly believe in the greening of capital and that access to competitive funding going forward will be based on the ability to deliver green transformation," said KCC chief financial officer Liv Dyrnes.
"Linking pricing to emissions performance demonstrates our commitment towards our targets to substantially improve CO2 efficiency in our fleet."
She added: "This facility shows us that sustainability ambitions pay off and we are pleased to cooperate with banks that have the same ambitions as us when it comes to sustainability."
Credit Agricole's Tanguy Claquin, its head of sustainability, added: "With a tailor-made solution indexed on KCC sustainability performance regarding its decarbonisation pathway, Credit Agricole CIB is supporting both in investing in new and energy efficient vessels and in committing itself towards sustainability strategy objectives."
Further cooperation likely
Nordea called KCC's plan to be carbon neutral by 2030 "ambitious".
"It is key for us to support our customers in their green transition both through advisory and products and this transaction is a strong testament to that," said Ylva Hannestad, its deputy head of group sustainable finance.
It is looking to work with KCC further on its liquidity needs.
Green financing is starting to gain momentum in shipping.
Last month, Norway's Fred Olsen Wind Carrier sealed a deal for $85m to fund its wind turbine installations vessels, while charterer and owner Gunvor Group has completed two such loan packages worth more than $1.2bn, which it said was a first for a trader.
And Oman Shipping completed the country's first green refinancing in June, tapping Standard Chartered for $35m.
