First ship financing agreement signed

First ship financing agreement signed

The first loan agreement has been signed under Export Credit Norway’s new ship financing solution, and has played a pivotal role in convincing a Norwegian shipping company to build in Norway, rather than abroad.

“We were actually very close to signing an agreement to build the vessel at a foreign yard, but the new ship financing solution helped us to decide to build in Norway. The new solution gives us greater financial foreseeability with respect to commissioning the vessel from a Norwegian yard, and we value this greatly,” says Nergård Group CEO Tommy Torvanger.

The new ship financing solution, which was formally approved by the King in Council on Friday 22 June 2018, enables Export Credit Norway to finance ship purchases by Norwegian buyers even when the vessel is constructed in Norway and intended for use in Norwegian waters. Qualifying vessels include fishing boats, ferries, express boats and wellboats.

“The ship financing solution will boost activity at Norwegian shipyards, allowing us to retain expertise and preserve jobs in Norway. The order Nergård has placed with Vard Brattvåg confirms the new solution’s role in supporting restructuring in the maritime supplier industry,” says Minister of Trade and Industry Torbjørn Røe Isaksen.

“The fisheries and aquaculture industry looks set to benefit from the solution, and it is positive to see that the first signed agreement concerns a fishing boat. I am pleased that shipping companies are using the solution,” says Minister of Fisheries Harald T. Nesvik.

Illustration: Vard

Popular solution
By the end of 2018, Export Credit Norway had received 27 applications under the new ship financing solution. In value terms, these contracts account for approximately 40% of Norwegian shipyards’ total order inflow in 2018.

“While several shipping companies and shipyards have signalled their interest in using the new solution, today’s agreement with Nergård constitutes the first signed loan agreement. Nergård has been a strong promoter of the solution, and I am therefore particularly pleased that it is involved in the first deal, which confirms that the ship financing solution is adding value for Norwegian yards and shipping companies,” says Export Credit Norway CEO Otto Søberg.

Export Credit Norway is providing NOK 354.3 million in loan financing, to be disbursed in Euros, for a 12-year term. The loan is guaranteed by a consortium of banks comprising SpareBank 1 Nord-Norge, SpareBank 1 SMN and Sparebanken Sogn og Fjordane.

“The primary purpose of the ship financing solution is to increase the number of boats built at Norwegian shipyards. As this transaction illustrates, Norwegian banks find it easier to become involved as guarantors when boats are built in Norway,” says Otto Søberg.

Contact us:
Kaare Haahjem
Kaare Haahjem Ocean Industries +47 415 54 431 +47 415 54 431

Published 20. May 2019