MOL to raise funds as Green Loan
- MOL finances World's Largest LNG bunkering vessel for Total with Green Loan -
December 23, 2019
TOKYO - Mitsui O.S.K. Lines, Ltd. ("MOL"; President & CEO: Junichiro Ikeda) today announced it has signed its first green loan, the proceeds of which will be used to partially finance the construction of the world's largest LNG bunkering vessel, which will be owned and operated by MOL (Note1). The loan is provided by BNP Paribas ("BNPP") and the Export-Import Bank of China ("CEXIM"), with both banks acting as Mandated Lead Arrangers and BNPP acting as Sole Green Structuring Advisor. MOL obtained a second party opinion in respect of the loan from a third-party institute (Note 2).
Green Loans are used to raise funds for businesses aimed at protecting and improving the environment. In the management plan "Rolling Plan 2019" MOL's goals include "developing environment and emission-free businesses into core businesses" which continues from "Rolling Plan 2018" In addition, the "MOL Group Environmental Vision 2030", established in April 2017, clarifies the group's vision on addressing environmental issues.
Matthew Forrest, Head of Shipping, Southeast Asia, BNP Paribas, said, "LNG bunkering vessels have a key role to play in meeting the shipping industry's growing appetite to use LNG as a cleaner fuel alternative. With the IMO2020 SOx regulation and the upcoming IMO2050 framework on GHG and CO2 emissions, BNP Paribas is pleased to have acted as Mandated Lead Arranger and Sole Green Structuring Advisor to help MOL in financing one of the world's largest LNG bunkering vessels. This is clearly a milestone transaction as it is the first green loan worldwide financing this vessel category. As a leader in both shipping finance and sustainable finance, BNP Paribas is driving green initiatives for clients globally as the shipping industry goes through a period of rapid transformation to drastically cut its carbon output and improve its sustainability performance."
CEXIM advocates the idea of green credit and green finance, and endeavours to place greater emphasis on supporting green vessels that are compliant with the trend of sustainability and environmental protection. It is CEXIM's aspiration to improve the ecological environment by lending support to green transportation.
The MOL Group also views responses to stricter environmental regulations and activities to reduce its environmental impact as opportunities to create new businesses, diversify its business portfolio and address new challenges in technical innovation. To foster a deeper understanding of the MOL Group's proactive initiatives on the environment among a wide range of stakeholders, 'MOL Blue Ocean Bonds' (Note3) was issued in August 2018 and 'MOL Blue Ocean Sustainability Bonds' (Note4) was issued in July 2019. In addition to issuing these green bonds, MOL's first green loan agreement has been executed between MOL, BNPP and CEXIM.
-Outline of Green Loan
|Borrower||MOL's wholly owned special purpose company|
|Lenders||BNPP, CEXIM (Syndicated Loan)|
|Use of Funds||Finance the construction of 18,600cbm LNG bunkering vessel (Note5)|
|Organization to evaluate and accredit||Vigeo Eiris|
Please refer to the February 06, 2018 press relese:
Total and Mitsui O.S.K. Lines sign a long-term charter contract for a pioneer Liquefied Natural Gas (LNG) bunker vessel
Effective December 12, 2019, MOL obtained a second party opinion about eligibility from one of the world's leading organization to evaluate and accredit the ESG performance, Vigeo Eiris of France, to secure eligibility and transparency of the green loan and increase their appeal to lenders. Please refer to the following links for details of the second party opinion.
Please refer to the August 07, 2018 press release:
MOL to Issue Japan's 1st Green Bonds Aimed at Individual Investors "MOL Blue Ocean Environmental Bonds"
Please refer to the June 28, 2019 press release:
MOL to Issue Sustainability Bonds - Issue to Includes Japan's 1st Sustainability Bonds Aimed at Individual Investors, 'MOL Blue Ocean Sustainability Bonds' -
Net proceeds will exclusively finance the construction of a 18,600cbm LNG bunkering vessel, which will be operated in northern Europe to supply LNG as a fuel for LNG-fueled mega Containerships after being delivered from shipyard in early 2020. The vessel will contribute to wider use of LNG as a fuel for merchant vessels and LNG can be used by the vessel as a fuel.