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Hapag-Lloyd ties up green ship finance for latest newbuildings

  • Finance concluded for 12 ultra-large containerships and 12 mid-sized boxships ordered in China in October 2024
  • Financing will be undertaken using Hapag-Lloyd’s ‘Green Financing Framework’
  • Funding comprises a mix of internal funds, mortgage loans, leasing and syndicated credit facility

‘The successful conclusion of several attractive financial transactions confirms green financing components are becoming increasingly important,’ said Hapag-Lloyd chief financial officer Mark Frese

HAPAG-LLOYD has confirmed it has completed financing arrangements for its latest alternative-fuel newbuilding orders, the shipbuilding contracts for which were signed in October 2024. 

The world’s fifth-largest containership operator said the $4bn of long-term financing for 24 new containerships conforms to the Loan Market Association’s Green Loan Principles. 

The green financing has been arranged for 12 ultra-large containerships of 16,800 teu, ordered from China’s Yangzijiang Shipbuilding, and 12 mid-sized boxships of 9,200 teu contracted from New Times Shipbuilding.

The larger ships have an estimated price tag of $210m each with the mid-sized vessels understood to be costing Hapag-Lloyd some $124m per vessel.  

All 24 ships were ordered to liquefied natural gas dual-fuel specification, will be able to operate using biomethane and were specified as ammonia-ready.

The new tonnage is contracted for delivery between 2027 and 2029.

Hapag-Lloyd said the financing transaction is in keeping with its updated Green Financing Framework. The framework is based on investment in state-of-the-art technology of larger and more efficient vessels, testing of alternative fuels such as biofuel, the introduction of digital solutions and improved routing of its vessel fleet.

The financing arrangements for the 24 newbuildings comprises four components. They include some $900m of Hapag-Lloyd’s own funds while $500m will be provided by two, undisclosed, banks in the form of bilateral mortgage loans.

The third component, of $1.8bn, will be provided via three leasing structures with the final $1.1bn financed via a syndicated credit facility backed by the China Export & Credit Insurance Corporation (Sinosure).

Hapag-Lloyd chief financial officer Mark Frese said: “The successful conclusion of several attractive financial transactions confirms that green financing components are becoming increasingly important.”

Hapag-Lloyd has a target for its boxship fleet to be climate-neutral by 2045, five years ahead of International Maritime Organization targets. It has an interim target to reduce the carbon intensity of its owned vessel fleet by 30% by 2030.

 

 

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