Green Shipping: KfW IPEX-Bank Evaluates Energy Efficiency of its Merchant Shipping Portfolio

Published Oct 15, 2012 12:15 PM by The Maritime Executive

Green Shipping: KfW IPEX-Bank evaluates energy efficiency of its merchant
shipping portfolio

- Energy efficiency is incorporated into financing decisions
- "Green" Ships not only ecologically but also economically advantageous

KfW IPEX-Bank, one of the largest ship financing banks in the world, has
evaluated together with FutureShip, a subsidiary of Germanischer Lloyd, the
energy efficiency of its shipping portfolio based on the Energy Efficiency
Design Index (EEDI). The applied valuation approach is based on the
standards of the International Maritime Organisation (special organisation
of the United Nations) and provides an indicator for the energy efficiency
and CO2 emissions of merchant vessels. From 2013 binding EEDI limits will be
introduced for newbuildings. 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 environmental impacts from maritime shipping is a serious
concern for us. The newly developed valuation method gives us the
opportunity to take into acoount the vessel's energy efficiency during our
financing decision and to favour "green" ships over similar ships with
poorer energy efficiency. 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 the joint project of KfW IPEX-Bank
and FutureShip."