Japanese shipping major Kawasaki Kisen Kaisha (K Line) said it has secured a climate transition linked loan from syndicated lenders, arranged by Mizuho Bank, worth JPY110bn ($991m).
The loan has a term of 5 years and follows K Line’s $54m transition finance for the LNG-powered car carrier Century Highway Green with Mizuho Bank and Sumitomo Mitsui Trust Bank in March this year.
The loan finance scheme has three sustainability performance targets in line with K Line’s transition strategies for decarbonisation and are linked with a prefixed loan interest matrix. They consist of the total emissions of greenhouse gases, CO2 emissions per ton-mile, and a carbon disclosure rating administered by the UK-based CDP.
K Line noted it is the first company to originate two consecutive transition finances in short term in Japan. According to the company, the loan amount is one of the largest scales among environmental, social and governance (ESG) loans which is based on a policy by the Loan Market Association.
The Tokyo-headquartered line also received certification from Japan Credit Rating Agency for compliance with Japan’s basic guidelines on climate transition finance, and its transition linked loan has been selected as a model case for transition finance by the ministry of economy, trade and industry.