Greener Ferries Set Sail With Help From M&G

    Stockholm (NordSIP) – UK based M&G Investments have agreed to lend NOK 1 billion to Fjord1, the largest and most environmentally-friendly ferry operating company in Norway.  Announced today, April 4th 2022, the senior secured loan was made on behalf of the M&G’s Catalyst investment strategy and external institutional client funds managed by the firm.

    Cleaning up the shipping industry

    Norway’s geography means that its transport infrastructure has historically involved extensive use of both public and private sector ferry services.  Fjord1 alone accounts for some 16 million passenger trips every year, which translates to a 45% national market share.  The International Maritime Organisation (IMO) Greenhouse Gas (GHG) Study 2020 reminded us that shipping accounts for just under 3% of global emissions.  The sector’s share of total emissions is expected to continue rising, given that almost 90% of global trade is transported on ships that mainly rely on Heavy Fuel Oil (HFO), an energy source so dirty it cannot be used on land. 

    A wave of electrification

    As Fjord1 CFO Anne-Mari Sundal Bøe explains: “The refinancing ensures that Fjord1 can continue to grow its leadership position and further increase its sustainability impact in the coming years.” The firm’s sustainability efforts have mainly focused on introducing electric vessels to the fleet, while also retrofitting existing ferries.  The latter effort means Fjord1 has the highest proportion of hybrid-electric ships of any Norwegian ferry company.

    Norway’s move towards sustainable shipping

    Fjord1’s moves towards greener energy sources is in line with the Norwegian government’s goal of halving the country’s maritime industry’s emissions by 2030 through the promotion of low carbon solutions for all vessels.  Beata Sperling-Tyler, Associate Director in M&G’s Infrastructure Finance team, says: “We are pleased to provide financing to a company that’s embracing the changes required to reduce its impact on the environment and create a sustainable future for the industry.  Given the dynamics of the domestic ferry industry in Norway and Fjord1’s leading position, this investment should provide a resilient and stable income stream for our investors.”

    Image courtesy of Fjord1
    Richard Tyszkiewicz
    Richard Tyszkiewicz
    Richard has over 30 years’ experience in the international investment industry. He has worked closely with major Nordic investors on consultancy projects, focusing on the evaluation of external asset managers. While doing so, Richard built up a strong practical understanding of the challenges faced by institutional investors seeking to integrate ESG into their portfolios. Richard has an MA degree in Management and Spanish from St Andrews University, and sustainability qualifications from Cambridge University, PRI and the CFA Institute.

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