Seatrade Maritime: Shipping investors cough up $35m for FEET

The Global Centre for Maritime Decarbonisation (GCMD) announced that the Fund for Energy Efficiency Technologies (FEET) — its vessel retrofit funding fund created with AIM Horizon Investments and other partners — successfully closed above its initial target, attracting $35m.

FEET will provide up to 100% upfront financing for retrofits on an unsecured lease, using quantified and verified fuel and regulatory savings as a basis for pay-as-you-save repayments. Financing will cover costs for equipment, installation, and sensors, leasing the hardware to shipowners. At the end of the lease, ownership of the hardware is transferred to the shipowner for a fee.

By using unsecured financing, FEET does not interfere with a vessel’s mortgage, said GCMD.

GCMD said the fund tackles market problems preventing the uptake of energy efficiency technologies, such as access to funding and uncertainty over performance. Many variables affect the fuel savings from energy efficiency technologies, including weather, vessel speed, hull coating performance, and routing. 

By linking repayments to the performance of energy efficiency technologies, uncertainty on return on investment periods can be reduced. GCMD performance pilots for energy efficiency technologies have used additional sensors and high-resolution data to isolate and quantify the contributions of individual technologies to a vessel’s energy savings. 

“As more data is collected across diverse operating and environmental conditions, these datasets can be used to model and predict savings under varying scenarios,” said GCMD.

The partners said the fund will manage financial risk with a blend of catalytic capital, commercial and preferred equities, and senior debt. The fund’s investment risk will be mitigated by investing in a diverse project base, spread across technologies, providers, and shipping sectors.

“Several projects have already been identified and have progressed to the final investment decision stage, reflecting strong industry interest and confidence. The fund remains open to shipowners and ship operators seeking support for adopting EETs,” said GCMD.

GCMD said it provides ‘catalytic equity’ and is the fund’s decarbonisation advisor. FEET is managed by Singapore-based maritime and aviation fund manager AIM Horizon Investments Investments. AIM Horizon Investments shareholders will hold the fund’s commercial equity position, while the preferred equity position is held by the Development Bank of Japan. DBS Bank and ING have agreed in principle to provide senior debt financing.

GCMD and AIM Horizon Investments said they aim to scale the fund to $500m by 2030, supporting around 200 ships.

Professor Lynn Loo, CEO, GCMD, said: “Bringing FEET to life has taken persistence and a willingness from everyone involved to step into the unknown. There was no playbook; our teams were learning as we went. This is exactly the kind of collaborative, problem-solving mindset needed to move the needle on maritime decarbonisation. My hope is that FEET will accelerate the uptake of shipboard energy efficiency solutions and help unlock the scale of action needed to turn the industry’s decarbonisation ambition into tangible progress.”

Michiel Muller, partner AIM Horizon & FPG AIM, said: “We are proud to work in this partnership and bring an innovative financial product for maritime decarbonisation. It has taken a huge collective effort to create a solution that immediately reduces carbon emissions and has competitive economics that will enable it to really scale.”