Wärtsilä and Clean Marine Energy align to offer ship owners "scrubber finance"
Wärtsilä and Clean Marine Energy (Europe) Ltd (CME) today announced the landmark signing of the shipping industry's first collaboration agreement that will provide a convenient funding solution to drive the uptake of exhaust gas cleaning technology. The move is intended to ease the financial burden on ship owners seeking to install scrubber systems in order to meet sulphur emissions legislation, the company said in its press release.
The financing solution, similar to those prevalent and proven in the building environment space, enables a ship owner to repay the cost of the scrubber system installation via a fuel adder, i.e. a fuel premium on the price of HFO by which the ship owner repays the cost of installing the scrubber. This provides a return from the differential between Heavy Fuel Oil (HFO) and Marine Gasoil (MGO) for a period of four to six years, depending on price spreads. This means that ship owners do not have the burden of meeting the up-front capital expenditure, which is typically between USD 3 million and USD 12 million per vessel. This investment is often difficult to pass on to charterers, whereas with CME financing, the fuel adder charge can be easily passed on until such time as the scrubber system is paid for. The concept therefore minimises the impact on the owner's balance sheet, banking and security arrangements.
