After several years of discussions with the shipping industry, UK-based maritime finance specialist Wavefront Asset Management (WAM) has developed a leasing package for shipowners so they can easily finance the equipment systems to meet IMO and USGC ballast water regulations.
WAM highlights that the capital outlay on ballast water management system (BWMS) equipment does not provide any investment return for shipowners. It is a regulatory expenditure.
WAM argues it is more efficient to let a specialist third party finance company incur the cost, leaving the shipowner to put its own precious resources into projects that earn a return on investment.
Leasing equipment has a range of advantages. It only has a small impact on a vessel’s daily OPEX and cash flow; plus a leasing contract preserves owner equity and debt lines. Leasing can also allow ship owners to place early orders and lock-in current BWMS prices.
Financiers, such as WAM, pay the equipment manufacturer and provide the BWMS for a specified time at an agreed monthly cost. Any warranty and performance matters remain between the business and manufacturer.
The initial leasing period is typically 36 months, which can be followed by secondary and tertiary periods at significantly lower monthly costs to the ship owner.
WAM director Kevin Swannack said: “As of October 2019, close to 10,000 vessels – nearly 10 percent of the global vessel fleet – have been fitted with ballast water management (BWM) systems. Basically, our sense is that this indicates that at least 50% of the global fleet will be retrofitted during 2021 and 2022, but the actual figure could easily be far higher. This clearly shows that shipowners are going to need to be proactive in getting their BWMS ordered, financed and installation slots arranged.”