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Brittany Ferries has secured capital backing from the European Investment Bank (EIB) and Societe Generale in the first financing deal under the EIB's EUR 750 million Green Shipping Guarantee (GSG) programme, which was set up by the EIB and Societe Generale last year.

The financing is to be used to develop Brittany Ferries' first LNG-powered ferry, the Honfleur, which is scheduled to enter into service in April 2019 on the Portsmouth to Caen cross-Channel route - becoming the first regularly operating LNG-fuelled ferry on the Channel.

As Bunker Index previously reported, the budget for the construction of the vessel is approximately GBP 175 million ($223 million), whilst supplier Total Marine Fuels Global Solutions (TMFGS) has already signed an agreement with Brittany Ferries for the delivery of LNG to the new vessel at the port of Ouistreham.

Honfleur - LNG delivery via containers

Due to the lack of LNG supply infrastructure at Ouistreham, TMFGS is teaming up with Dunkerque LNG and Groupe Charles Andre to develop an innovative supply method that will enable LNG to be supplied via 40-foot (ISO standard) LNG tank containers - mobile storage tanks with a metal frame that are designed for the transport of bulk liquid products.

The Honfleur will be the first passenger ship in the world to be equipped with onboard cranes that will allow the LNG containers to be lifted into a fixed position.

For the supply of LNG to the Honfleur, a truck will, first of all, load a tank container from the LNG terminal in Dunkirk and then transport it to the port of Ouistreham, where it will be placed on board the vessel - utilizing the specially installed cranes for this purpose - and then used to supply a fixed LNG storage tank located at the rear of the ship. Once empty, the containers will be removed the next time the Honfleur calls at Ouistreham and replaced with full containers.

Financing

In 2016, as part of the investment plan for Europe (Juncker Plan) and the Connecting Europe Facility (CEF), the EIB and Societe Generale signed a EUR 150 million guarantee framework agreement to support shipbuilding and the modernization of existing vessels for sustainable shipping, in line with the objectives of COP21.

Societe Generale acted as main arranger of the EUR 142.6 million financing for the acquisition of the Honfleur; it includes a tranche of EUR 49.5 million fully guaranteed by the EIB.

"This green financing in the maritime sector is a 'first' at the European level," said EIB Vice-President Ambroise Fayolle. "This is a particularly innovative financing, successfully carried out thanks to the European guarantee under the Juncker plan, the support of the CEF and Societe Generale's pilot role in this sector. By structuring riskier financing in a new sector, the bank of the European Union strongly reaffirms its commitment to sustainable, responsible and sustainable growth on an international level. Our goal is to support the efforts of French shipowners to develop a more environmentally friendly maritime transport thanks to an adapted and attractive financing tool. The environmental performance of the "Motorways of the Sea" is at the heart of our climate action in accordance with the commitments made at COP21 and the priorities of the French Government's Major Investment Plan."

Jean-Marc Roue, chairman of Brittany Ferries' supervisory board, said: "Brittany Ferries is doubly proud today. It is the very first shipping company to benefit from the framework agreement concluded in 2016 between the EIB and Societe Generale, under the GSG Programme, thanks to the Juncker Plan and the CEF. But also, thanks to this financing it becomes the first French passenger transport company to pave the way towards energy transition using LNG."

Severin Cabannes, Deputy Chief Executive Officer of Societe Generale, commented: "Societe Generale reaffirms its support to its clients for the development of green maritime transport. This transaction, which is part of Societe Generale's "Sustainable & Positive Impact Finance" offer, also demonstrates our capacity to innovate and our pioneering spirit to develop financing solutions that integrate the environmental challenges of our clients."