U-Ming Marine Transport Corporation, Taiwan’s largest publicly listed bulk carrier company, has secured its first sustainability-linked loan worth $45 million.
The loan was obtained from E.SUN Commercial Bank and it was preceded by a rigorous due-diligence process that evaluated the company’s financial strength and ESG achievements.
The loan also incorporates an incentive scheme linked to pre-determined ESG targets, where U-Ming will enjoy a discount on interest rates and save borrowing costs once these targets are achieved.
U-Ming said that the accomplishment of the targets would be verified by an independent third party.
This loan facility will be used to purchase one LNG Dual Fuel Tier III 190,000 dwt bulker, which has been awarded a 10-year charter contract by mining company Anglo American together with another three LNG-powered bulkers in November 2020.
Featuring a length of about 299m and width 47.5m, the newbuildings will be fitted with MAN Energy Solutions’ high-pressure ME-GI engines to further reduce their environmental footprint, which have been described as having a negligible methane slip level.
U-Ming added it would invest in the installation of other energy-saving devices such as a Mewis duct, propeller boss fin and alpha lubricator.
Furthermore, the ships will also be equipped with U-Ming’ proprietary Fleet Safety Performance (FSM) and Fleet Performance Management (FPM) systems supported by its operation center, enabling near real-time speed, weather and route updates.
“U-Ming is one of the frontrunners to operate LNG dual-fuelled bulk carriers even though they are currently more costly to build. We are especially delighted that our commitment is recognized by E.SUN Bank with this SLL,” U-Ming President C. K. Ong said.
“Going onward, we will continue our U-Ming’s fleet renewal and decarbonisation strategy by fostering cooperation with industry stakeholders including the ship financing sector.”
E.SUN Bank believes financial institutions can be torch bearers of a sustainable and inclusive future with green financing.
“We are very impressed by U-Ming’s sustainability track record and delighted to support their green initiatives with this SLL. We hope this SLL will encourage more maritime players to embed ESG targets in their business development,” the bank noted.
2021: Strong start of bulker market
The dry bulk market started strongly in 2021, Baltic Dry Index has soared past the 2000 mark in March 2021, supported by exports of soybeans from US and Brazil to China, as well as surging iron ore demand from China.
However, with the resurgence of the pandemic and the moves towards cleaner fuels, energy demand remains weak and impact prospects for coal, U-Ming said.