Green finance is a ‘big opportunity for Singapore’

Photo: Pepi Stojanvski - Unsplash pepi-stojanovski-MJSFNZ8BAXw-unsplash (1).jpg
The environmental, social and governance (ESG) revolution in financing creates a unique opportunity for Singapore to demonstrate its leadership in the maritime sector, according to a ship finance expert.

Speaking at Capital Link’s Singapore Maritime Forum, Julian Proctor, CEO of Purus Marine said: “This is a phenomenal opportunity for Singapore to really take leadership when it comes to green finance. London is taking a lead in green finance but in Asia there really isn’t a financial capital that is showing that leadership. Given Singapore’s natural maritime complex and the skills surrounding that ecosystem, there is a unique opportunity for Singapore and the MPA (Maritime and Port Authority of Singapore) to provide that leadership.”

George Kypraios, ceo of Yefira Consulting said that there were innovative funds, particularly in the UK that were less focussed on equity and more on growth. Those funds were strongly focused on cashflow, he said, but also on the thesis of the management team. “The steel itself is the least of the considerations of some of these players. There are a lot of players out there, equity and non-equity who are focused on both ESG solutions but also supporting good business idea.”

Listen to a recent espisode of the Maritime Podcast with Michael Parker, Chairman, Global Shipping, Logistics and Offshore - Citigroup

Kypraios said that Singapore needs more funds with strong visions to compete with the finance innovation being seen in the UK, Germany and the US.

Axel Siepmann, Managing Partner at Braemar Naves said that the media landscape might bring an owner of a seven-year-old vessel to worry that there will be no refinancing options open to them in five years’ time. “Let me ease the concerns, I am deeply convinced that yes it will be no problem even finding bank financing for this type of exercise.”

The focus on ESG is in the innovative part of the market amongst the biggest and strongest players, said Siepmann, but the rest of the market is still on traditional propulsion and will be for some time. Should banks move away from financing traditionally-fuelled vessels, which Sipemann doubts they will, the scenario would create an opportunity for the alternative finance sector to support traditional shipowners to refinance.

Tobias Backer, co-founder of Fleetscape Capital agreed that finance will be available for older ships in years to come, but at greater cost. “There will be a clear differentiation on pricing and structure. That’s not necessarily because funds such as ourselves or others treat them differently, it’s a function of how we fund ourselves. When banks look at us, no different than their conversation with shipping, they will have one set of parameters for environmentally friendly assets and another set for traditional assets… that we then pass on to our clients.”

TAGS: Asia
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