KfW IPEX Bank Considers Energy Efficiencies for Ship Financing

KfW IPEX-Bank and FutureShip have evaluated the energy efficiency of its shipping portfolio based on the Energy Efficiency Design Index (EEDI). The applied valuation approach provides an indicator for the energy efficiency and CO2 emissions of merchant vessels. From 2013 binding EEDI limits will be introduced for newbuildings (from 2014 for cruise ships). However, the energy efficiency of existing vessels also plays an increasingly important role during chartering decisions.

Using the EEDI methodology, the energy efficiency of 88% of the ships in the IPEX portfolio could be evaluated. "In this regard our merchant shipping portfolio is on average slightly better than the world fleet," explained Dr. Carsten Wiebers, global head of maritime industries at KfW IPEX-Bank.

"The reduction of the environmental impact from maritime shipping is a serious concern for us. The newly developed valuation method gives us the opportunity to take into account vessels' energy efficiency during our financing decision and to favor 'green' ships over similar ships with poorer energy efficiency," Wiebers said.

"Furthermore, the evaluation verified that less energy efficient ships are associated with a higher credit risk. The compatibility of ecological and economical aspects for ship financing has now been empirically supported through this joint project.”


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