The Norwegian export credit agency Export Credit Norway has assembled a specialised team and tailor-made financing solution to support vessel owners who need to retrofit equipment such as gas exhaust cleaning systems, ballast water treatment systems and new coating systems.

Analyses show that as many as 60,000 vessels worldwide will need to retrofit scrubber systems by 2020 and ballast water treatment systems by 2021.

“Money is tight and access to reasonably priced capital is a challenge for many players in the international shipping and maritime industries at the moment. Hence, attractive financing of retrofit equipment could make the investment less demanding for many vessel owners,” says Olav Einar Rygg, Export Credit Norway’s Director of Lending, Ocean Industries.

Export Credit Norway can finance up to 85 percent of the contract value for retrofit equipment that international vessel owners acquire from Norwegian companies. Norwegian content must account for minimum 30 percent of the amount of the Norwegian supplier contracts.

“The Norwegian shipping and maritime industry has a number of world leading technology suppliers within ballast water treatment systems and other required retrofit systems. What we provide is attractive financing for vessel owners who are interested in purchasing this technology,” says Rygg.

The maturity of the retrofit loans will be between 5 and 8.5 years per single loans, depending on the economic life, amount and type of investment. Fixed interest loans are offered through so-called CIRR loans (commercial interest reference rate), which are set by the OECD once a month. From mid-May to mid-June 2017, the CIRR are at 2.28 percent for loans in NOK and 3.02 percent for loans in USD. All loans must be guaranteed by the Norwegian Export Credit Guarantee Agency (GIEK) and / or acceptable commercial banks, and the rates are exclusive of guarantee premiums.

For ship owners that have several vessels that need to retrofit equipment, Export Credit Norway can offer a credit frame agreement for the entire fleet. The loans for the purchase of the retrofit equipment will then be structured as single loans under the credit frame agreement. The single loans will be disbursed upon fulfilment of pre-agreed conditions.

“Our aim is to make the financing process as smooth and efficient as possible, so that vessel owners can focus their time on core business. That is why we offer a credit frame agreement which essentially covers numerous vessel retrofits under the same loan facility,” says Rygg.

Norwegian shipping companies may also apply for financing of retrofits at Norwegian shipyards, provided that the vessel will be engaged in foreign trade or generate its revenue in the offshore market.

Ship owners or equipment suppliers must apply for export financing before the commercial contract is signed.