Mitsui O.S.K. Lines, Ltd. (“MOL”) announced it has signed its first green loan, the proceeds of which will be used to partially finance the construction of the world’s largest LNG bunkering vessel, which will be owned and operated by MOL.
The loan is provided by BNP Paribas (“BNPP”) and the Export-Import Bank of China (“CEXIM”), with both banks acting as Mandated Lead Arrangers and BNPP acting as Sole Green Structuring Advisor.
MOL obtained a second party opinion in respect of the loan from a third-party institute.
Green Loans are used to raise funds for businesses aimed at protecting and improving the environment. In the management plan “Rolling Plan 2019” MOL’s goals include “developing environment and emission-free businesses into core businesses” which continues from “Rolling Plan 2018” In addition, the “MOL Group Environmental Vision 2030”, established in April 2017, clarifies the group’s vision on addressing environmental issues.
Matthew Forrest, Head of Shipping, Southeast Asia, BNP Paribas, said, “LNG bunkering vessels have a key role to play in meeting the shipping industry’s growing appetite to use LNG as a cleaner fuel alternative. With the IMO2020 SOx regulation and the upcoming IMO2050 framework on GHG and CO2 emissions, BNP Paribas is pleased to have acted as Mandated Lead Arranger and Sole Green Structuring Advisor to help MOL in financing one of the world’s largest LNG bunkering vessels. This is clearly a milestone transaction as it is the first green loan worldwide financing this vessel category. As a leader in both shipping finance and sustainable finance, BNP Paribas is driving green initiatives for clients globally as the shipping industry goes through a period of rapid transformation to drastically cut its carbon output and improve its sustainability performance.”
CEXIM advocates the idea of green credit and green finance, and endeavours to place greater emphasis on supporting green vessels that are compliant with the trend of sustainability and environmental protection. It is CEXIM’s aspiration to improve the ecological environment by lending support to green transportation.
The MOL Group also views responses to stricter environmental regulations and activities to reduce its environmental impact as opportunities to create new businesses, diversify its business portfolio and address new challenges in technical innovation. To foster a deeper understanding of the MOL Group’s proactive initiatives on the environment among a wide range of stakeholders, ‘MOL Blue Ocean Bonds’ was issued in August 2018 and ‘MOL Blue Ocean Sustainability Bonds’ was issued in July 2019. In addition to issuing these green bonds, MOL’s first green loan agreement has been executed between MOL, BNPP and CEXIM.
Outline of Green Loan
|Borrower||MOL’s wholly owned special purpose company|
|Lenders||BNPP, CEXIM (Syndicated Loan)|
|Use of Funds||Finance the construction of 18,600cbm LNG bunkering vessel|
|Organization to evaluate and accredit||Vigeo Eiris|