(Photo Credit: Louis Vest, Flickr Creative Commons)The European Investment Bank and ING signed an agreement this week for 300 million euros ($370 million) to support green investments in the European maritime shipping market. Each institution will contribute 150 million euros to a sector risk-bearing facility for projects that improve transport vessels’ environmental performance.
“It’s no secret that the shipping sector is a major contributor to carbon dioxide emissions,” European Investment Bank president Werner Hoyer said. “The facility was set up after numerous discussions with Dutch counterparts from the public and private sector and aims to help the shipping sector transition to a greener future. ”
The EIB and ING hope the new agreement will ensure that the sponsors of sustainable projects in the maritime transport sector benefit from advantageous financial terms. Projects that reduce the emission of pollutants from vessels and also increase fuel efficiency should be presented to ING and will be subject to the financial institution’s risk acceptance criteria.
“This agreement helps us support our shipping clients into making changes to their business models by adapting for the future in increasingly sustainable way,” Isabel Fernandez, head of wholesale banking at ING, said in the joint announcement.
The new facility will be invested with the EIB gradually over the next three years, with ING’s shipping team providing leadership and management, in order to create a diversified portfolio, the financial institutions say. “The deal also benefits from the guarantee of the European Fund for Strategic Investments (EFSI), the central element of the Juncker Plan,” they added. The plan, named for European Commission president Jean-Claude Juncker, is also called the European Commission’s Investment Plan.
Decarbonization and greenhouse gas emissions reductions remain pressing issues for the global shipping industry, which has a carbon footprint around the size of Germany’s, according to the Guardian. If left unchecked, those emissions are expected to keep rising.
Last November, around 150 leaders from the international maritime transport industry met at the UN Convention on Climate Change in Bonn to talk about alternative fuels, new technologies, and improved energy efficiency. The day-long summit aboard the MS RheinFantasie river cruise ship didn’t produce any unanimous decisions, but it did illuminate steps for companies to start to take, Grist’s Maria Gallucci reported at the time. That included slow steaming, better data and transparency, and more local demonstration projects.
New financing approaches were also at the top of the list. “Financiers should consider the risk of climate policies when pricing out their loans, which would give an advantage to cleaner projects while adding scrutiny to run-of-the-mill constructions,” Gallucci wrote. “Government and regional banks can also step in and assume some of the risk if cleaner ships lose money.”
In April 2017, the EIB and Dutch bank ABN Amro signed an agreement to support investments for greening the European maritime shipping fleet — the first framework with a financial institution in the Netherlands made possible by the EFSI.
“Financing the transition to more sustainable transport systems and networks requires a commitment to invest,” EU commissioner for transport Violeta Bulc said last spring. “Today’s agreement demonstrates that the Investment Plan can play an important role in mobilizing private finance to support this transition.” The latest agreement between the EIB and ING expands that support.
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