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Norway to finance vessel retrofits

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Dry Bulk,

Following the IMO ratifications of the ballast water and exhaust gas treaties, government-owned Export Credit Norway has offered financing to international vessel owners who purchase retrofit equipment from Norwegian suppliers.

The Norwegian export credit agency Export Credit Norway has assembled a specialised team and tailor-made financing solution to support vessel owners who need to retrofit equipment such as gas exhaust cleaning systems, ballast water treatment systems and new coating systems.

Analysis show that as many as 60 000 vessels worldwide will need to retrofit scrubber systems by 2020 and ballast water treatment systems by 2021.

“Money is tight and access to reasonably priced capital is a challenge for many players in the international shipping and maritime industries at the moment. Hence, attractive financing of retrofit equipment could make the investment less demanding for many vessel owners,” commented Olav Einar Rygg, Export Credit Norway’s Director of Lending, Ocean Industries.

Export Credit Norway can finance up to 85% of the contract value for retrofit equipment that international vessel owners acquire from Norwegian companies. Norwegian content must account for minimum 30% of the amount of the Norwegian supplier contracts.

“The Norwegian shipping and maritime industry has a number of world leading technology suppliers within ballast water treatment systems and other required retrofit systems. What we provide is attractive financing for vessel owners who are interested in purchasing this technology,” says Rygg.

The maturity of the retrofit loans will be between 5 and 8.5 years per single loans, depending on the economic life, amount and type of investment.

For ship owners that have several vessels that need to retrofit equipment, Export Credit Norway will offer a credit frame agreement for the entire fleet. The loans for the purchase of the retrofit equipment will then be structured as single loans under the credit frame agreement. The single loans will be disbursed upon fulfilment of pre-agreed conditions.

“Our aim is to make the financing process as smooth and efficient as possible, so that vessel owners can focus their time on core business. That is why we offer a credit frame agreement which essentially covers numerous vessel retrofits under the same loan facility,” commented Rygg.

Norwegian shipping companies may also apply for financing of retrofits at Norwegian shipyards, provided that the vessel will be engaged in foreign trade or generate its revenue in the offshore market.

Ship owners or equipment suppliers must apply for export financing before the commercial contract is signed.

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