Mubo Provides Additional $2.2 Billion Support for Eco-Friendly Ships

Maintaining Ultra-Competitive Edge in Shipbuilding
Continuous Expansion of Ship Financing Scale

Korea Trade Insurance Corporation (K-SURE) will continuously increase the scale of ship financing to support the order of eco-friendly ships in the shipbuilding industry. This expansion of ship financing support aims to maintain 'super-gap competitiveness' in response to the paradigm shift in ships, including strengthened environmental regulations related to shipping.

K-SURE announced on the 16th, "We will provide an additional $2.2 billion in financing support for eco-friendly ships by the first half of next year."

In the first half of this year alone, K-SURE provided financing support worth approximately $1.6 billion for a total of 17 ships. Through K-SURE’s financial support, LNG-powered ships that reduce carbon emissions by using liquefied natural gas (LNG) instead of bunker C fuel oil, and methanol-powered ships, which emit less carbon and are gaining attention as next-generation eco-friendly fuels due to their ease of storage and transport, are being built.

Global shipping companies evaluate not only the basic factors such as the shipyard’s technological capabilities and ship prices when deciding on a shipyard for ship orders, but also the availability of ship financing support from the export credit agencies (ECAs) of the shipyard’s country and the competitiveness of such financing as key criteria. In particular, China and Japan competitively operate various financial support policies to expand orders for their domestic shipyards. To strengthen the order competitiveness of Korean companies in the eco-friendly ship market and further widen the super-gap with competing countries, K-SURE’s ship financing support is essential.

Lee In-ho, President of the Korea Trade Insurance Corporation.

K-SURE’s ship financing is broadly divided into owner financing and construction financing. Owner financing is a system where K-SURE provides guarantees to facilitate funding when domestic or overseas shipping companies borrow funds from banks to purchase ships. In the first half of this year, K-SURE provided owner financing for new shipbuilding projects of major global shipping companies such as Switzerland’s MSC and the UK’s FOSI.

Construction financing is a financial support project related to refund guarantees (RG) for advance payments required when shipping companies that ordered ships pay advance payments to shipyards during the shipbuilding stage. In May, K-SURE supported the issuance of advance payment refund guarantees through export credit insurance for a shipbuilding contract between CMA-CGM, the world’s third-largest shipping company by fleet capacity, and a domestic shipyard.

K-SURE plans to promote $2.2 billion in eco-friendly ship financing support by the first half of next year to actively back the strengthening of Korea’s shipbuilding industry’s leadership, which maintains the world’s number one market share in the eco-friendly ship market. Additionally, K-SURE will support future eco-friendly ships such as ammonia-powered ships, which are expected to be developed in earnest from next year as zero carbon emission ships, through active financial support to secure future growth engines for Korea’s shipbuilding industry.

Lee In-ho, President of K-SURE, said, "During this major paradigm shift in the shipbuilding industry, we are successfully supporting the orders of many eco-friendly ship projects by Korean companies. Based on the experience K-SURE has accumulated and strong cooperative relationships with shipping companies and global financial institutions, we will spare no effort to help our shipbuilding industry solidify its position as a global leader in the eco-friendly ship market."