Booming ship orders at Chinese and South Korean shipyards
Booming global container lines business and strong growth in the liquefied natural gas industry are driving large orders at Chinese and South Korean shipyards. Container ship orders for the fourth quarter of 2020 were dominated by so-called mega-max ships with a capacity of over 18,000 TEUs.
There is also a strong demand for mid-size neo-Panamaxes, which carry between 12,000 and 16,000 TEUs, and are the largest ships that can pass through the new locks in the Panama Canal.
On July 2, KfW IPEX-Bank and BNP Paribas announced the signing of a green loan for the German container line Hapag-Lloyd to finance the construction of six large container ships by Daewoo Shipbuilding & Marine Engineering in South Korea .
Together with nine other banks, KfW IPEX-Bank provides loan capital of US $ 852 million. KfW IPEX-Bank and BNP Paribas acted as global coordinators and arrangers of green loans. The loan consortium also includes Bank of America, Citi, SMBC, Deutsche Bank, DZ Bank, ING Bank, Société Générale and UniCredit Bank.
The 12-year loan (from the date of delivery) is guaranteed by the Korea Trade Insurance Corporation (K-Sure). Hogen Lovells represented Hapag-Lloyd, while Watson Farley & Williams advised KfW IPEX-Bank and BNP Paribas.
Funding from a consortium led by KfW IPEX-Bank and BNP Paribas enables Hamburg-based Hapag-Lloyd to modernize its fleet of around 240 operated vessels. The transaction was carried out in accordance with the Green Loan Principles of the Loan Market Association and simultaneously verified by an independent expert in the form of a secondary opinion from DNV.
The six 23,500 TEU vessels are expected to be delivered from 2024 and are dual-fuel vessels capable of running on liquefied natural gas (LNG).
“With this financing, we are helping our long-time customer Hapag-Lloyd in their transition to ‘green’ shipping,” says Andreas Ufer, member of the board of directors of KfW IPEX-Bank. “A green loan was made possible because Hapag-Lloyd used the loan funds exclusively for the project, which was clearly defined by defined criteria. – the operation of LNG vessels will significantly reduce carbon emissions, marking a significant improvement over the current standard.
In February, KfW IPEX and BNP Paribas signed a US $ 417 million green loan backed by K-Sure with Hapag Lloyd to finance three 23,500 ultra-large container ships. This was part of a larger order for Hapag-Lloyd for six new container ships to be delivered between April and December 2023 at a total cost of US $ 1 billion. The second batch of three container ships was financed through a $ 472 million sale and leaseback transaction with ICBC Financial Leasing.
Switch to LNG
Mediterranean Shipping Company (MSC), the world’s largest container line behind Maersk, also has a huge order book in Asian yards. This includes 40 ultra-large conventionally fueled vessels under construction in Yangzijiang, which some MSCs would like to convert to run on LNG.
In January, MSC signed orders with Yangzijiang for two 24,000 TEU ships, much larger than the ships traditionally built at the yard. At around the same time, the China State Shipbuilding Corporation (CSSC) announced that affiliated shipyards Jiangnan Shipyard and Hudong-Zhonghua Shipbuilding had signed orders for four 24,000 TEU vessels with Bank of Communications Financial Leasing (Bocomm Leasing). These will be chartered to MSC.
In addition to building larger container ships, Chinese yards are also focusing on securing orders for Floating LNG Regasification and Storage Units (FRSUs) to serve the booming global production market. LNG electricity.
The first FRSU ever built in a Chinese shipyard was recently completed, to be delivered to the Greek operator Dynagas. The 174,000 cubic meter Transgas Power vessel was built by Hudong Zhonghua Shipbuiding, a subsidiary of CSSC. A baptismal ceremony was held in Shanghai on June 28. Work is expected to be completed on a sister ship, the Transgas Force, by the end of the year.