Wednesday, 15 May 2024 14:07
Financing options and challenges facing shipping companies today under the new ESG, ETS-CII-EEXI-EEDI regulationsThe new challenges facing shipping companies today – from geopolitical tensions to adapting to the plethora of new stricter environmental rules and ESG requirements – and the financing they require were the focus of the first panel of the 8th Maritime Conference entitled: «The relationship between shipping companies and banks». The discussion was moderated by Nikos Daskalakis, General Manager of Alpha Shipping Advisors Ltd.
The participants agreed to resilience and adaptability that the Greek shipping industry is facing new challenges and the need for banks to be close to Greek shipowners who are investing in new ships and upgrading existing ones in order to meet the new requirements.
«Tsunami of new regulations»
“Never before have there been so many regulations enforced at the same time. We have a tsunami of new regulations in the 2020s – 2030s,” said Stamatis Tsantanis, President & Chairman of the Board. CEO Seanergy Maritime Holdings Corp. and United Maritime Corp. As he explained, his company has been preparing for the upcoming changes for 9 years. “But for most companies it is a huge challenge. All of this will be a huge burden. Companies have to show resilience and adaptability,” he stressed.
Regarding funding, he said that the right timing is very important. “But bank financing will always be there and is a facilitator for new investments,” he said.
He also explained that investment and therefore raising finance is not only about buying new ships. “To make ships more competitive, we need to make very significant investments in existing ones to adapt them to the new requirements,” he said. Seanergy Maritime Holdings was the first Greek shipping company to secure funding from the EU to upgrade its ships.
«I am not worried about the challenges. I am concerned about the way the IMO legislates»
For his part, Michalis Bodouroglou, Chairman of Allseas Marine S.A., commented that he is not worried about the challenges at all, since Greek shipping has always gone against the challenges.
«Financing will always be there, its cost differs from company to company, since each client is assessed with a risk index. Regarding the new stricter rules on emissions, the Greek shipping industry is always adapting and faster than others,” he said.
«Greek shipowners are investing in new technology and taking a big risk. They rely on shipyards and others to provide the technology of the future,” Bodouroglou said, adding that the effort to reduce the impact of climate change “concerns all of us and our children and grandchildren.».
The chairman of Allseas Marine stressed, however, that he is particularly concerned about the way the IMO is legislating. “I am surprised how an international organisation draws up indicators that refer to the ship, but are not dependent on the ship,” he explained.
Leasing as a financing tool
«’We have big challenges and demands, arising from the wars in Ukraine and Gaza, the trade war in China, banking regulations, inflation, high interest rates. They all create challenges, but they also create opportunities,” said Sakis Voudris, director Business Development of Neptune Leasing.
In recent years, the revenues of shipping companies have increased. “In this environment our customers want to grow, they are ordering new ships and there is quite a significant demand for financing and different financing solutions, such as leasing».
Very high on the agenda, Voudris explained, are the ESG rules. “We are trying to find financial solutions to support our customers, especially for existing ships, as a large number of ships are at least 15 years old,” he noted and added: “We fully support our customers’ choices, we want to be there for them with solutions that can extend the age».
As he said, leasing is also mainstream finance like banking. “Our relationship with banks is symbiotic. We fully cooperate with them and rely on them,” he concluded.
“We are expanding our portfolio, leaving no one out in the cold»
Theofanis Moustakatos, Head of the Shipping Operations Division of the National Bank of Greece, spoke about the trends in shipping finance.
«I see European banks backing away from shipping finance because of the costs of Basel IV. The absorption of these costs by the bidding companies and banks is something that will be seen in 2025,” he said..
This European gap, he said, is being filled by Asian funding, and we may see banks from the Middle East coming into the game.
«Our aim is to be a major bank in the shipping finance sector by expanding our portfolio. Our job is to take care of our customers, not to leave anyone out in the cold,” Mr. Moustakatos stressed..
However, he noted that he is very optimistic, as the adaptability of Greek shipping to the green transition and to all the new challenges is reflected in all the figures.
«Alongside shipping companies with speed and flexibility – ESG is increasingly important»
In recent times we have had crises, wars, Ukraine, Gaza, the problems in the Panama Canal, the new rules. “All these things we have to take into account as banks,” explained Konstantinos Petropoulos, General Manager, Head of Shipping and Structured Finance at Piraeus Bank.
«In 2023 we achieved a 12.6% increase in the portfolio. In the first quarter of 2024 we have reached EUR 4 billion. Our strategy is always to be close to our customers and respond to their needs with speed and flexibility,” he said.
As he said today there are many tools that include ESG targets. “These tools will be increasingly important not only for our clients who are thus rewarded for their success in meeting the targets, but also for the bank, as we are also audited on ESG targets,” he stressed.