ICONIC Project Finance (DXB) represented Taiyo Life Insurance Company, a Japanese Institutional Entity, as the sponsor, manager and subordinated note investor of the Green Loan to exclusively finance the building of NYK’s first methanol-fueled chemical tanker. This significant deal has created a new opportunity to facilitate institutional investor access to shipping finance in Japan and consists of a 2 billion yen loan to build a methanol-fueled chemical tanker.
This green loan has been certified by Japan Credit Rating Agency Ltd. (JCR) to be aligned with the highest rank of “Green 1” of the Green Loan Principles International principles launched by the Europe-based Loan Market Association (LMA) and the Asia Pacific Loan Market Association (APLMA) in March 2018.
NYK became the first company in the global shipping industry to issue labeled green bonds, and they have been used to fund environment-friendly liquefied natural gas (LNG) fueled vessels and other NYK projects. To support investment in environmental technology more from a finance viewpoint, NYK invited Taiyo Life Insurance Company to enter into this green loan agreement.
Sal Fischer, First Degree Independent Local Representative, for IPFA in the APAC region said:
“We congratulate Taiyo Life Insurance Company on this important milestone. This first-of-a-kind shipping finance deal is a key development in the Asian capital markets, and we are thrilled to have advised Taiyo in the establishment of this Green Loan.”
In the medium-term management plan “Staying Ahead 2022 with Digitalization and Green”, NYK has indicated its goal to integrate ESG principles into management strategies to contribute to the sustainable development of society and enrichment of the company’s corporate value.
The methanol-fueled main engine reduces sulphur oxides (SOx) by approximately 99 percent compared with the use of heavy oil. In fact, the vessel’s entire SOx emissions, including the electrical generator, will fall by about 75 percent compared with using oils that comply with low-sulphur oil regulations. By using methanol as a marine fuel the International Maritime Organization’s are met. Methanol is a clean-burning fuel that produces less nitrogen oxides (NOx) and particulate matter (PM), enabling more environment-friendly operation by NYK.
Taiyo Life Insurance will promote green finance and continue its efforts to keep a wide range of stakeholders involved in their proactive approach to environmental investment as the company makes efforts towards a sustainable society with technology that eases environmental burdens.
The IPFA’s ICONIC team was led by Tokyo partners Sal Fischer and Michael Murcdoch, with London partner Surrita Timons, Dubai partner Aniza Dellializi, Zurich partner Melvyn Daniels and the appointed London associates. Further support was provided by IPFA’s market-leading Shipping Finance team, led by Greece’s partner Yiorgos Andrianopoulos.
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