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Green Shipping

KfW IPEX-Bank evaluates energy efficiency of its merchant shipping portfolio

KfW IPEX-Bank, one of the largest ship financing banks in the world, has evaluated together with FutureShip, a subsidiary of Germanischer Lloyd, the energy efficiency of its shipping portfolio based on the Energy Efficiency Design Index (EEDI).

The applied valuation approach is based on the standards of the International Maritime Organisation (special organisation of the United Nations) and provides an indicator for the energy efficiency and CO2 emissions of merchant vessels. In 2013, binding EEDI limits were introduced for newbuildings. However, the energy efficiency of existing vessels also plays an increasingly important role during chartering decisions.

Merchant shipping portfolio of KfW IPEX-Bank ranks above average

Using the EEDI methodology, the energy efficiency of 88% of the ships in the KfW IPEX-Bank portfolio could be evaluated, with positive results: The merchant shipping portfolio is on average slightly better than the world fleet.

Energy efficiency reduces credit risk

Furthermore, the evaluation verified that less energy efficient ships are associated with a higher credit risk. The compatibility of ecological and economical aspects for ship financing has now been empirically supported through the joint project of KfW IPEX-Bank and FutureShip.

Further topics related to green shipping

More sustainable scrapping of ships

Inclusion of scrapping clauses in loan agreements

The aim of the initiative is for shipping companies to observe minimum standards of occupational safety and environmental protection when scrapping their ships, and therefore to view scrapping as part of their own value-added chains. The banks ABN Amro, ING and NIBC established the initiative.

Taking the 'green' route in ship finance

HANSA, one of Europe's leading international maritime journals, took a closer look at the financing approach of KfW IPEX-Bank, which places much importance on supporting environmentally friendly shipping. Editor-in-chief Krischan Förster spoke at length with Holger Apel, Global Head of Maritime Industries.

June 2018 (article available in German only)