Finnvera prepared to assist in ship investments resulting from the Sulphur Directive
The EU Sulphur Directive will enter into force in 2015, and Finnish shipping companies must convert or modernise their fleet to meet the stricter requirements. So far Finnvera’s ship guarantees have been granted for vessels ordered to Finland from a shipyard operating in Finland, but in the future the Act on the State’s Ship Guarantees can also be applied to vessels purchased abroad or to the conversion, repair or renovation of vessels abroad.
The granting of a Ship Guarantee is based on project-specific risk assessment. Security, such as a ship mortgage, must be provided for the financing. A Ship Guarantee can be granted when sufficient commercial financing is not available for the project.
According to the EU rules on State aid, a loan cannot exceed 80 per cent of the purchase price and the Ship Guarantee cannot exceed 80 per cent of the loan sum. In consequence, Finnvera’s maximum commitment in ship investments is 64 per cent of the purchase price.
When a Ship Guarantee is granted for vessels or vessel conversions purchased abroad, the project must have sufficient Finnish interest. When considering Finnish interest, attention is paid, for instance, to the following: the vessel will sail under the Finnish flag; the shipping company is Finnish; the vessel will transport goods to serve Finland’s foreign trade; and the vessel will employ Finnish seafarers.
“The need to expand the use of Ship Guarantees has mainly come up with regard to cargo ships, which have not been built in Finland for a long time. If these environment-friendly vessels utilise Finnish know-how and technology, this will strengthen the Finnish interest of the acquisition. However, as the primary alternative, effort must be made to use the financing provided by the export credit agency of the shipyard’s home country,” says Executive Vice President Topi Vesteri, responsible for Finnvera’s export financing.
Executive Vice President Topi Vesteri, tel. +358 29 460 2676