Development Bank of Japan Inc. (DBJ) received a Merit Award by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP*1) for outstanding work in the category of Environmental Development. In selecting DBJ for the award, ADFIAP cited the establishment of "Zero-Emission-Accelerating Ship Finance" including the financing for an LPG carrier for Kumiai, a Japanese shipowner based in Singapore. The 2023 awards were presented at the ADFIAP General Meeting held on the 15th and 17th of May 2023.
The ADFIAP Awards recognize the work of development finance institutions with distinguished achievements in the Asia-Pacific region. The aim of the awards is to publicize deals and projects which are both outstanding and instructive, as well as to share financial methods and techniques.
DBJ and ClassNK established the "Zero-Emission-Accelerating Ship Finance" program (hereinafter "Program") to support the maritime industry's transition toward decarbonization.
As tightened environmental regulations and the introduction of carbon pricing are expected in the maritime industry, DBJ and ClassNK have anticipated an increasing need for a system to reasonably evaluate the asset value of environmentally friendly ships, requiring investment and financing and the two companies' respective knowledge and expertise.
Under the established Program, ClassNK evaluates ships based on a comprehensive scoring model jointly developed by DBJ from the perspective of "decarbonization, environmentally friendly performance, and innovativeness," and DBJ provides investment and financing.
As the first project under the Program, ClassNK evaluated CRYSTAL OASIS (IMO No. 9915806), an LPG dual-fueled large LPG carrier owned by Kumiai Navigation (Pte) Ltd. (head office: 1 Raffles Place #27-62 One Raffles Place Tower 2 Singapore 048616; Managing Director Tomomaru Kuroyanagi) and DBJ provided a loan to Kumiai to finance its acquisition.
Kumiai has been taking progressive steps toward the transition to decarbonization, such as placing orders for LPG dual-fueled LPG carriers ahead of other industry players. The ship is a state-of-the-art LPG dual-fueled large LPG carrier built at Sakaide Works of Kawasaki Heavy Industries, Ltd. and delivered to Kumiai in June 2022.
In evaluating the ship, the following factors were taken into account: (1) the dual-fuel main engine using LPG has realized a significant reduction of sulfur oxide (SOx) and carbon dioxide (CO2) in the exhaust gas, and the ship has been certified to be compliant with the Energy Efficiency Design Index (EEDI) Phase 3*2 requirements achieved prior to the enforcement of the regulation; (2) the installation of an exhaust gas recirculation (EGR) system and a selective catalytic reduction (SCR) system has enabled the ship to meet the nitrogen oxide (NOx) Tier III regulation; and (3) in further consideration of the prevention of air and marine pollution, the ship is equipped with various environmental technologies not mandated by international conventions and is assigned ClassNK's "Environmental Awareness (EA)" and "Advanced Environmental Awareness (a-EA)"*3 notation, which are designations for ships implementing special and advanced environmental measures.
The ship was given an "S" rating, the highest rank in the Program, recognizing investment in ships "with particularly high decarbonization, environmentally friendly performance and innovativeness."
The CRYSTAL OASIS contributes to decarbonization by shipping enterprises, and thus this project and the execution of the loan constitute an initiative that contributes to environmental development, leading to the ADFIAP award.
Under its 5th Mid-Term Management Plan (see the post "About the 5th Mid-Term Management Plan" dated May 20, 2021), DBJ is promoting its GRIT Strategy,*4 aimed at fostering a sustainable society through investments and loans. DBJ is committed to making further contributions to sustainable societies and regional revitalization.
*1 ADFIAP
| Official name | Association of Development Financing Institutions in Asia and the Pacific |
| Establishment | October 1976 (headquarters: Manila, Philippines) |
| Membership | 89 institutions in 38 countries and regions |
*2The EEDI regulations require new ships to be evaluated in accordance with the uniform fuel efficiency index and to attain the required level. The required level for each ship type will be tightened incrementally (Phase 3 for LPG to attain the required level). Phase 3 for LPG carriers (15,000 DWT and above) requires a reduction rate of at least 30% compared to the level at the start of the regulation.
*3A notation on a ship's classification certificate indicates that special measures have been taken for a specific purpose. The CRYSTAL OASIS has become the first in ClassNK's registry that meets its "Environmental Guidelines" and is granted the "Advanced Environmental Awareness (a-EA)" notation.
*4In DBJ's GRIT Strategy, "G" stands for "Green," initiatives to become carbon neutral with established technologies; "R" stands for "Resilience & Recovery," initiatives that support the construction of a flexible, strong, safe and secure regional, social an industrial infrastructure; "I" stands for "Innovation," initiatives for innovations that are commercially feasible from a long-term perspective; and "T" stands for "Transition/Transformation," strategic initiatives to steadily lead transition toward carbon neutrality and other goals, based on current business foundation. These are the Bank's priority areas under the Fifth Medium-Term Management Plan.
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