Green Finance:Green Loans

In accordance with the new medium-term management plan "Staying Ahead 2022 with Digitalization and Green" that NYK announced in March 2018, the company aims to integrate environmental, social, and governance (ESG) principles into management strategies to contribute to the sustainable development of society and enrichment of the company' s corporate value.

To achieve these goals, NYK has become the first company in the global shipping industry to issue labelled green bonds, and after that achievement in May 2018, NYK has arranged several green loans to further support investment in environmental technology from a finance viewpoint.

NYK will continue its efforts to keep a wide range of stakeholders involved in the company' s proactive approach to environmental investment as the company makes efforts to contribute to realizing a sustainable society with technology that lessens environmental burdens.

More Information:

Loan from Taiyo Insurance Company (Arranged in December 2018)

Agreement date December 27, 2018
Creditor Taiyo Life Insurance Company
Loan payable JPY 2 billion
Period 10 years from December 27, 2018, to December 27, 2028
Use of proceeds Building a methanol-fueled chemical tanker
Certification Japan Credit Rating Agency, Ltd. (JCR)
Overall evaluation Green 1 (the highest rank)

All the finance procured from this green loan will be used to build the new methanol-fueled chemical tanker. Its methanol-fueled main engine will reduce sulphur oxides (SOx) by approximately 99 percent compared with the use of heavy oil. In fact, the vessel' s entire SOx emissions, including the electrical generator, will fall by about 75 percent compared with using oils that comply with low-sulphur oil regulations. Using methanol as a marine fuel helps meet the International Maritime Organization' s new regulations that cap sulphur content in marine fuels coming into effect in 2020. Methanol is a clean-burning fuel that produces less nitrogen oxides (NOx) and carbon dioxides (CO2), enabling more environment-friendly operation by NYK.

Second-Party Opinion

In the green loan evaluation conducted by JCR, this syndicated loan was evaluated for its contribution to SDGs objectives and targets. The detailed report by JCR can be found at the link here.

Outline of the ship

Deadweight tonnage: about 49,000 tons
Length overall: about 183 meters
Breadth: 32.2 meters
Shipbuilder: Hyundai Mipo Dockyard Co. Ltd.
Delivery: Scheduled for 2019

Green Syndicated Loan (Arranged in March 2019)

Agreement date March 20, 2019
Arranger/Agent MUFG Bank, Ltd.
Participating financial institutions Agricultural Cooperatives (Aichi Prefecture)
Shinkin Central Bank
The Nishi-Nippon City Bank, Ltd.
The Higo Bank, Ltd.
The Hiroshima Bank, Ltd.
MUFG Bank, Ltd.
The Musashino Bank, Ltd.
The Yamaguchi Bank, Ltd.
and one other institution
Total of nine financial institutions
Total amount JPY 9 billion
Period 5 years from March 29, 2019, to March 29, 2024
Use of proceeds Installing scrubber systems
Certification Japan Credit Rating Agency, Ltd. (JCR)
Overall evaluation Green 1 (the highest rank)

All the finance procured from this green loan will be used to install scrubber systems, that effectively address the strengthened SOx (sulphur oxides) fuel regulation which will soon enter into force. Scrubber systems use seawater and chemicals to remove sulphur from ship exhaust gases, effectively eliminating 86 percent of SOx emissions.

Second-Party Opinion

In the green loan evaluation conducted by JCR, this syndicated loan was evaluated for its contribution to SDGs objectives and targets. The detailed report by JCR can be found at the link here.

In addition, this syndicated loan is the first "ESG management support loan" for MUFG Bank, Ltd. and Mitsubishi UFJ Research and Consulting Co. Ltd.(MURC), and NYK' s industry-leading ESG management received MURC' s highest ESG evaluation.

How a scrubber works