KfW IPEX-Bank Finances LNG-Powered Ship in Germany

KfW IPEX-Bank is financing the construction of the first completely gas-powered and thereby low-emission ship in Germany.

The 15,600 cubic metre LNG tanker will be used to decentrally supply Liquefied Natural Gas to energy intensive industries and LNG tank facilities in the North Sea and Baltic Sea as well as to supply the towngas network in Stockholm, the Swedish capital. With the help of an innovative ship propulsion system installed for the first time in Germany, the vessel will power the engine from the boil-off gas from its cargo hold.

The Dutch shipping company Anthony Veder Group N.V. ordered the ship from Meyer Werft/Papenburg and already has concluded a long-term charter contract with a Norwegian energy company. The vessel will be built at the Neptun shipyard in Rostock/Warnemünde, which belongs to the Meyer group of companies since 1997. KfW IPEX-Bank provided and structured the financing.

“I am pleased that we can participate in realising such a future-oriented project” said Christian K. Murach, Member of the Management Board of KfW IPEX-Bank at the contract signing. “Here we are developing the environmentally-friendly ‘green’ shipping of the future. This makes not only ecologic, but also economic sense. Moreover, the completion in Rostock will contribute to supporting the shipyards in eastern Germany, in particular in a viable segment that has a long-term, promising future.”

The financing is covered by Euler Hermes and falls under the German CIRR (Commercial Interest Reference Rate) for ship financing. The term of the Hermes covered tranche is 12 years.

After its delivery at the end of 2012 the ship will operate in Scandinavia and in the Baltic Sea, where in the coming years the emission regulations will be further tightened. The Baltic Sea is one of the most densely sailed seas of the Earth where starting in 2015 the strictest regulations of MARPOL Annex VI of the International Maritime Organisation (IMO) will apply. The international, globally applicable agreement to prevent ocean pollution from ships includes in this Annex, among others, rules to reduce the emission of pollutants into the air. Starting in 2015 the emissions in the Baltic Sea may only contain 0.1% sulphur gases. Shipping in these regions will then only possible with gas-powered or emission-reducing filters.