Support for the German shipbuilding industry

The Ship Financing CIRR scheme is a federal promotion programme aimed at supporting German shipyards in international competition. It contributes to safeguarding German shipyards and their suppliers as well as the jobs provided by these industries. KfW, acting on behalf of the Federal Republic, has appointed its subsidiary, KfW IPEX-Bank, to implement the programme. KfW IPEX-Bank administers the CIRR scheme while maintaining effective information barriers (so-called “Chinese walls”) to the other activities of the bank.

The Ship CIRR programme allows banks to offer loans at a long-term-interest-rate, known as the “CIRR”, to buyers of ships built in German shipyards. This rate is established by the OECD for fixed-rate government-sponsored financing. The international framework for the programme is defined by the “OECD Sector Understanding on Export Credits for Ships” (SSU). In Germany, the guidelines for the CIRR Ship Financing Programme (“Richtlinie für die Übernahme von Gewährleistungen zur Absicherung des Zinsrisikos bei der Refinanzierung von CIRR-Krediten für den Bau von Schiffen”) and the “General Terms (for) Interest Make-up in the Refinancing of CIRR loans for the construction of ships” are important legal foundations.

Applications can be submitted by banks that are appointed for the financing of a ship. The exact criteria can be found in the General Terms. The types of ships eligible for support are specified by the SSU of the OECD. These include, in essence:

• Transport vessels (above 100 gt): cargo and passenger vessels such as container and cruise ships
• Specialised vessels (100 gt and above): offshore vessels, icebreakers, fishing vessels
• Tugs (from 365 kW)
• Unfinished shells of ships which are afloat and mobile

Floating docks, mobile offshore units, private yachts and naval vessels are not eligible.

Promotion programmes based on the CIRR are common internationally and are also used in countries such as France, Italy and Finland.

“CIRR” stands for “Commercial Interest Reference Rate”. It is a fixed rate for state-sponsored loans, which according to the SSU may not be undershot. The OECD publishes the CIRR monthly for different maturities and currencies. The Federal Republic may set a higher fixed rate for a transaction, known as “Applicable CIRR”, depending on the interest rate environment, that is then stipulated in the loan agreement between the bank and the purchaser of the ship. The interest rate risk is largely eliminated for the purchaser over the entire loan term. This is made possible through corresponding agreements between the Federal Republic, KfW, and the bank, which regulate, among other things, the assumption of the interest rate risk.

Banks generally utilise long-term refinancing from KfW for the financing they provide. A minimum margin (the so-called “fee for administrative expenses”) is granted to the bank. In addition, banks can agree their own margin with their borrowers.

Further details are available under "Further information" or can be requested from the CIRR-Desk of KfW IPEX-Bank. The CIRR-Desk also provides transaction-specific indications upon request.

Further information

Guidelines for the CIRR Ship Financing Programme (in German language)

OECD Arrangement on Officially Supported Export Credits

OECD CIRR

General Terms Interest Make-up in the Refinancing of CIRR loans for the construction of ships (PDF, 396 KB, non-accessible)

For any questions, please contact us at