Bermuda and Norway-based shipping firm Avance Gas Holding has signed and completed a $104 million sustainability-linked term facility with a bank syndicate.
As informed, the transaction will secure financing of the company’s first two dual-fuel liquefied petroleum gas (LPG) newbuilds, Avance Polaris and Avance Capella.
Scheduled for delivery in Q4 2021 and Q1 2022, the ships are being built at South Korean shipyard Daewoo Shipbuilding & Marine Engineering (DSME).
The facility has a maturity at the earlier of five years from delivery of the second newbuilding and June 2027. The financing is expected to be drawn upon delivery of the 91,000 cbm vessels from the shipyard.
“The facility has an annual sustainability margin adjustment mechanism linked to the company’s ambition to reduce and outperform the carbon intensity targets set in the Poseidon Principles,” Avance Gas said.
“The dual fuel newbuildings will significantly lower our carbon footprint and the sustainability-linked financing further demonstrates our commitment to de-carbonisation of the shipping industry with support from the bank syndicate in this facility.”
Avance Gas operates a fleet of thirteen ships and six dual-fuel LPG newbuildings due for delivery in Q4 2021, Q1 2022, Q4 2022 and Q1-Q4 2023.