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$5.65bn Japanese green ship fund coming from Anchor Ship Partners


With an eye on Japan’s goal of net-zero greenhouse gas emissions by 2050, Japanese ship finance giant Anchor Ship Partners will launch a substantial fund to aid decarbonization efforts in the shipping sector.

Japanese newswire Nikkei states the new Y600bn ($5.65 bn) fund will start by ordering LNG-fuelled gas carriers to lease to such logistics providers as Nippon Yusen, Mitsui O.S.K. Lines and Kawasaki Kisen.

Anchor Ship will consider eventually investing into other vessels that run on or transport such non-carbon-based fuels as hydrogen and ammonia, as well as in other related businesses, like producers of hydrogen tanks. The new fund will be operated in accordance with guidelines from the United Nations Environment Program.

The Japanese government is eager to increase the share of renewables in energy production and cut logistics-sector emissions as part of its 2050 goal, and looks to curb carbon dioxide emissions in maritime shipping specifically by 86%. Anchor Ship is part of a growing group of institutional investors that have thrown their support behind decarbonization efforts.

Anchor Ship will seek investments in the new fund from regional banks and other financial institutions. It aims to provide double-digit annual yields, largely from lease income, and to operate the fund for 15 years. The fund will be reviewed periodically by Sumitomo Mitsui Trust Bank to assess whether it is having a positive environmental impact.

Maritime shipping has surged with the growth of international trade, with global volumes growing 44% in a decade to 10 billion tons in 2019, according to the Japan Maritime Center.

The figure is only expected to rise long-term despite a dip amid the coronavirus pandemic, making curbing emissions in the sector a key priority. Ships account for roughly 3% of global CO2 emissions.

Anchor’s first fund launched in 2007, created by a team of ship financiers at what is now Mizuho Bank. The company has launched a total of four funds since it was founded.

Photo of LNG bunkering ship Kaguya: Kawasaki Heavy Industries