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StanChart takes lead in Vista Shipping SLL
Proceeds from US$89.6 million loan for purchase of low-emission LNG dual-fuel vessels
The Asset 28 Mar 2023

Standard Chartered has led a US$89.6 million sustainability-linked loan (SLL) for Vista Shipping, a joint venture between Hafnia and CSSC Shipping Hong Kong, to finance the purchase of its first pair of liquefied natural gas (LNG)-powered dual-fuel vessels in support of both organization’s decarbonization ambitions.

LNG dual-fuel vessels, which are lower in emissions compared with traditional bunker fuel fleets, have grown in popularity in recent years among shipowners, lessors and operators as the maritime industry seeks to reduce carbon emissions.

Standard Chartered acted as the facility coordinator, sole sustainability co-ordinator, mandated lead arranger, and facility and security agent for the transaction. The bank also assisted Vista Shipping in securing a second-party opinion on this loan from quality assurance and risk management company DNV, which confirmed that the key performance indicators (KPIs) and sustainability performance targets are material and align with its sustainability ambitions.

The SLL arrangement introduces ambitious targets on annual efficiency ratio and sulphur oxide emissions over a 10-year period, and has a bi-directional margin ratchet mechanism to incentivize performance in meeting these targets.

The delivered vessels, the bank points out, must also adhere to Hafnia’s environmental management system (EMS), which seeks to minimize adverse environmental effects and ensures that contractors follow clear EMS requirements around measurement and monitoring of environmental effects.

“Building dual-fuel vessels is an important part of Hafnia’s strategy to transition into a more sustainable maritime future,” says Perry Van Echtelt, Hafnia’s CFO. “Standard Chartered’s sustainability-linked loan structure aligns our organisational sustainability objectives to meet the loan KPIs.”

Abhishek Pandey, managing director and global head of shipping finance at Standard Chartered, adds: “The maritime industry is crucial to the flow of goods and economic prosperity yet is also a key contributor to global greenhouse gas emissions annually – a concerted effort across shipowners, yards, charterers and financiers is needed to make it more sustainable. We hope that the success of this transaction can pave the way forward for future dual-fuel financing for the shipping industry, as we work with our clients to accelerate the transition towards net zero.”

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