U-Ming Secures it's First Sustainability Linked Loan


Published Apr 13, 2021 5:54 PM by The Maritime Executive

U-Ming Marine Transport Corporation (“U-Ming”) (TSEC code: 2606), Taiwan’s largest publicly listed bulk carrier company, has secured its first Sustainability-Linked Loan (“SLL”) of USD45 million with E.SUN Commercial Bank, a testimony on its long-standing commitment and accountability on sustainability.

To secure the SSL, U-Ming underwent a rigorous due-diligence process that evaluated the company’s financial strength as well as ESG achievements. The SSL also incorporates an incentive scheme linked to pre-determined Environmental, Social and Governance (“ESG”) targets, where U-Ming will enjoy a discount on interest rates and save borrowing cost once these targets are achieved. The accomplishment of these targets will be verified by an independent third party.

This loan facility will be used to purchase one LNG Dual Fuel Tier III 190,000 DWT bulk carrier, which has been awarded a 10-year Dual Fuel dry bulk charter contract by Anglo American, a leading global mining company together with another three LNG Dual Fuel bulk carriers in November 2020.

This bulk carrier, with a length of about 299m and width 47.5m, are built with the concept of energy-saving and sustainability. 

The newbuildings will be powered by LNG, a viable and alternative fuel that emits significantly lower greenhouse gas (GHG) emissions. The vessels will also be fitted with MAN Energy Solutions’ high-pressure ME-GI engines to further reduce their environmental footprint with negligible levels of methane slippage, while increasing operational efficiency and reliability.

To further increase fuel efficiency, U-Ming will be investing and installing other energy-saving devices such as a Mewis duct, propeller boss fin and alpha lubricator. The new vessels 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, thus further saving fuel and ensuring safe navigation.

Commenting on the Sustainability-Linked Loan, U-Ming President Mr. C. K. Ong, said: “U-Ming once again demonstrates our accountability and transparency to achieve an international ESG standard. U-Ming is one of 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. 

“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. Together, we will provide sustainable long-term green shipping solutions to our customers.”

E.SUN Bank said: “Climate change is one of the biggest threats in human history and it requires a committed and collective approach to tackle this crisis. 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 is 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. Together we make a positive change to the industry and the environment.”

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.

In times of uncertainty, U-Ming will continue to stay resilient with strong leadership, a prudent business strategy as well as a solid balance sheet.

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