KfW IPEX-Bank: Second Green Loan for Hapag Lloyd AG

KfW IPEX-Bank is supporting its long-standing customer Hapag-Lloyd with its second Green Loan within six months – to finance the construction of six large container vessels. Together with nine other banks, KfW IPEX-Bank is contributing debt capital of USD 852 million. In this context, KfW IPEX-Bank has assumed the role of global coordinator and lead arranger together with BNP Paribas for the syndicated Green Loan.

The vessels, each with a capacity of around 23,500 standard containers (TEU), are scheduled to be delivered starting in 2024 and are dual-fuel ships able to run on liquefied natural gas (LNG). All six ships are being built by the Daewoo Shipbuilding & Marine Engineering shipyard in South Korea.

“With this financing, we are helping our long-standing customer Hapag-Lloyd with its transition to ‘green’ shipping,” said Andreas Ufer, member of the Management Board of KfW IPEX-Bank. “A Green Loan was possible because Hapag-Lloyd is using the loan funds exclusively for the project, which has been clearly defined by set criteria – operating the ships with LNG will significantly reduce carbon emissions, marking a clear improvement on the current standard.”

Lutz Diederichs, CEO BNP Paribas Germany, said: “Scaling up the net zero transition requires a mobilisation of sustainable finance tools across the whole economy. This latest Green Loan with Hapag-Lloyd demonstrates a progressive approach to decarbonising the shipping sector, which is a critical industry to support in reducing global emissions”.

With MAN Energy Solutions - which is supplying the engines - and DNV GL, two members of the German Maritime Export Initiative (GeMaX) are also on board: With their fuel-efficient dual-fuel engines from MAN, the newbuildings will not only cut CO2 emissions by around a quarter compared with conventional drives. The liquefied natural gas drive will also reduce sulphur dioxide and particulate matter by more than 90 per cent. The financing runs for 12 years from the date of delivery; the credit facility is secured by Korea Trade Insurance Corporation (K-SURE). The transaction was completed in compliance with the Green Loan Principles of the Loan Market Association (LMA) and simultaneously verified by an independent expert in the form of a secondary party opinion from DNV.

The financing provided by a consortium led by KfW IPEX-Bank and BNP Paribas is enabling Hapag-Lloyd to modernise its fleet of around 240 operated ships. The shipping company had already ordered vessels of the same size at the end of 2020. With these two transactions KfW IPEX-Bank and BNP Paribas were leading banks in the financing of altogether nine of the 12 ships.

When it comes to sustainability, shipping requires particular efforts. KfW IPEX-Bank has been looking closely at the issue of green shipping for many years now and has already concluded a number of financing packages for ships with LNG or hybrid drives. Financing for sustainable concepts such as reducing emissions and increasing efficiency in shipping through measures like retrofitting has become a permanent fixture in the world of ship financing at KfW IPEX-Bank.