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EIB seeks to leverage €250m of private sector investment for sustainable shipping

The Green Shipping Guarantee Programme is a €3 billion initiative

The European Investment Bank (EIB) hopes to leverage €250 million of private sector investment to make the shipping industry greener ahead of changes to standards.
Alongside a €3 billion guarantee programme for the sector, the bank is currently mulling a €250 million loan programme. Loans would be offered initially to fleets in northern Europe – primarily France, the Netherlands and Scandinavia – to finance new ships and upgrades to existing vessels. A spokesman for the EIB said the private sector is expected to match fund the loan programme – led by local banks that are already involved in lending to the space.
The Green Shipping Guarantee Programme (GSGP) is a €3 billion initiative, of which the EIB is considering contributing €750 million. The source of the remaining investment has not been disclosed. The GSGP will encourage private-sector lending to the shipping industry by guaranteeing “up to 100%” of the investment, the spokesman said.He added that the guarantee programme would focus on smaller-scale lending, whereas the loan programme would offer large scale financing that local banks may not be able to provide themselves.
The move comes ahead of changes to standards for the European shipping industry, in a bid to cut the EU’s CO2 emissions by at least 40% from 2005 levels by 2050. From 2018, large ships will also be required under EU law to report verified annual emissions.
“The maritime industry is currently facing a challenge in securing the investment levels required to meet the new standards,” said the EIB spokesman.
A number of other transactions and initiatives have taken place in recent months to finance the greening of ships in Europe, including what Dutch bank ABN Amro claimed was the first ‘sustainable shipping’ loan, issued in January, and a private placement managed by Rabobank to fund improvements to ships last month.