Japanese shipping major Mitsui O.S.K. Lines, Ltd. (MOL) has concluded a commitment line agreement through a transition-linked loan with Sumitomo Mitsui Banking Corporation (SMBC).
As explained, this loan is a financial instrument designed to assist companies that are taking action on climate change and are committed to reducing greenhouse gas (GHG) emissions in accordance with a long-term strategy to achieve a decarbonized society .
According to MOL, this is Japan’s first global commitment line agreement using a transition-linked loan. The value of the loan is $452 million.
MOL has established a transition finance framework that sets sustainability performance targets for the goals set forth in MOL Group Environmental Vision 2.1 . The eligibility of the loan has been assessed in a third-party evaluation by “DNV Business Assurance Japan” to ensure that it complies with all the necessary standards.
This is the third such loan that MOL has procured, following previous financing arrangements for the LNG bunkering vessel Gas Vitality and bulk carrier Shofu Maru equipped with the Wind Challenger, which converts wind power into propulsive force.
It marks the first time MOL used this approach to procure funds not tied to a specific vessel.
To remind, the ship Gas Vitality, the first LNG bunker vessel to be based in France , was named during a ceremony held at Hudong-Zhonghua Shipbuilding last year.
Meanwhile, Shofu Maru, the world’s first coal carrier equipped with Wind Challenger , was delivered and started operation on 7 October 2022.
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World’s 1st cargo ship equipped with ‘Wind Challenger’ delivered
The 235-metre-long Shofu Maru will transport coal mainly from Australia, Indonesia, and North America as a dedicated vessel for Tohoku Electric Power.
The introduction of the Wind Challenger is expected to reduce greenhouse gas (GHG) emissions by about 5% on a Japan-Australia voyage and by 8% on a Japan-North America West Coast voyage, compared to a conventional vessel of the same type, and contribute to curbing GHG emissions during fuel transportation.
The Wind Challenger is a system, developed mainly by MOL and Oshima Shipbuilding, which uses a telescoping hard sail that harnesses wind power to propel the vessel. By installing the system, it is possible to reduce the amount of fuel used for operation, which is expected to reduce environmental impact and improve economic efficiency.
In addition to Shofu Maru, MOL Group already decided to construct a second bulk carrier equipped with the Wind Challenger.