“Shipping companies often buy equipment for several ships at the same time. The “parts of ship” scheme allows us to put together a financing solution that gathers all equipment purchases on a single ship, and thus to offer better terms,” says Tellef Tellefsen at Export Credit Norway.
Pumps, paint and design services
A shipping company may, for example, wish to buy pumps from a Norwegian exporter. Collecting all the equipment on a single ship has certain advantages. Instead of 10% financing for each of eight ships, the scheme provides 80% financing for one ship.
The solution is attractive due to both its simplified structure and the possibility of longer agreement periods.
Tellef K. Tellefsen, Export Credit Norway
“Gathering all the equipment on a single ship allows us to offer terms like those available in other ship-related transactions, not just for capital goods. Among other things, we can offer repayment periods of up to 12 years, compared to the usual five to eight years,” says Tellefsen. The solution is attractive due to both its simplified structure and the possibility of longer agreement periods.
“Parts of ship” was approved by the OECD in the mid-2000s, and since then has been popular among exporters seeking to finance sales of parts, pumps and other equipment, design software and even paint.
Recent users of the “parts of ship” scheme include Norwegian shipping companies such as Höegh LNG, Grieg and Oddfjell SE.
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Tellef K. Tellefsen