Financing for clean shipping investments

Transcription

1 Financing for clean shipping investments Background document for: Green technology and alternative fuels MS Viking Grace Page 1/16

2 Authors: Tapani Stipa, Marja Aho-Pynttäri Publisher: The Baltic Institute of Finland, Helsinki branch Aleksanterinkatu FI Helsinki URI: Licensing information: This work is produced under a contract with the Finnish Transport Safety Agency (Trafi; contract number 24709/ /2013), and is distributed by Trafi and the copyright holder. For licensing details, please contact copyright holder. Helsinki Branch, The Baltic Institute of Finland. This work may be cited as: Stipa, T., Aho-Pynttäri, M.. Financing for clean shipping investments. Green technology and alternative fuels conference, MS Viking Grace, URI: Retrieved on Page 2/16

3 Contents Introduction International financing sources European Investment Bank (EIB) loans LGTT guarantees The Europe 2020 Project Bond (PB) Initiative loans Marguerite Fund (MF) equity financing Nordic Investment Bank (NIB) loans Nordic Environment Finance Corporation (NEFCO) BSAP Fund grants (legacy) Northern Dimension Partnership on Transport and Logistics (NDPTL) Support Fund grants European Bank for Development and Reconstruction (EBRD) EU financing sources Connecting Europe Facility Horizon2020 Regional Development Fund (ERDF) & Cohesion Fund EU SBSR seed money facility Legacy EU instruments TEN-T grants Marco Polo grants National mechanisms State aid Norwegian NOx fund Merging Private and Public financing, special purpose vehicles Deployment of financing Grants Equity Debt Structured finance Conclusions Page 3/16

4 1. Introduction Shipping is facing increasing costs in the next few years. These costs may be substantially reduced through investments in new technologies, either on existing vessels or through newbuilds. Up to different vessels visiting or sailing in the North Sea and the Baltic Sea annually are affected by these emission control areas. Roughly of these could 1 make an economically viable investment for example in scrubbers. Presently very few clean shipping motivated investments are seen relative to the potential, partly because of the prevailing difficult shipping market. This document summarizes the available public financing mechanism that could support investments in clean shipping technologies, based on the priorities expressed by key stakeholders. 2. International financing sources These are financing sources that are in principle available to the whole Baltic Sea Region, and may support clean shipping related investments. Each financing mechanism makes its own decisions on a case-by-case basis European Investment Bank (EIB) loans EIB s main financing instruments are medium and long-term loans with fixed or variable interest rates. EIB lends for both public and private borrowers. Individual project loans are provided for projects of at least 25 million Euros and EIB covers up to 50% of the investment costs, but the average loan amount is approximately one-third. Rest of the financing must come from other sources. The project must be economically, financially, technically and environmentally sound. The lending conditions depend on the investment target and securities that third parties offer. Indirect lending or intermediate lending is designed for smaller projects than 25 million Euros. Smaller loans are made available through intermediate loans to partner banks. Loan conditions are flexible and vary in time, size and duration. The intermediate institution does the lending decision and EIB has no contractual relationship with the beneficiaries EIB gives additional support for priority projects, with higher risk profile than normally, in a form of Structured finance. For example trans-european transport and energy networks and other infrastructure, the knowledge economy, energy and SMEs are priorities that can apply support from Structured Finance Facility (SFF). The facility uses a mix of the following instruments: senior loans and guarantees incorporating pre-completion and early operational risk subordinated loans and guarantees ranking ahead of shareholder subordinated debt mezzanine finance, including high-yield debt for SMEs experiencing high-growth or are undergoing restructuring project-related derivatives 1 Pan-Baltic Manual of Best Practices on Clean Shipping and Port Operations, Page 4/16

5 2.2. LGTT guarantees LGTT is an acronym for Loan Guarantee Instrument for Trans-European Network projects and it is a part of the EU s TEN-T program. With LGTT, the Commission and EIB try to facilitate and accelerate the private sector s participation to the financing of the big TEN-T projects. Big transport infrastructure projects are often having difficulties in attracting private-sector financing because in the beginning of the project the revenue risk is relatively high. LGTT will improve the viability of the project and partly cover the revenue risk. By improving the risk profile of the senior debt, LGTT facilitates the difficult ramp-up period of the projects. The projects of common interest in the field of transport (e.g. TEN-T and CEF projects) can benefit from the LGTT instrument. The projects should also be compliant with Community laws and the financial viability of the project should be based on revenues, tolls or other user-charges based income. TEN-T projects that have an appropriate level of private finance participation are eligible for LGTT operation. The maximum amount of the guarantee is 200 million Euros per project and the guarantee should not exceed 10% of the senior debt. The support is available from five to seven years after the completion of the project The Europe 2020 Project Bond (PB) Initiative loans EIB is searching for new ways of financing infrastructure projects and after the pilot phase Euro bonds will be one of the financing instruments and support the aims of Connecting Europe Facility, CEF. The EU is trying to create a new class of securities and the pilot phase of will facilitate their introduction to the markets. Projects that are relevant according the TEN and CIP policy guidelines may get Project Bond financing. During the pilot phase only a limited number of projects, approximately 5-10, can be funded. The projects should be at relatively developed stage or require refinancing after the building phase. Bonds will not replace direct grants because some of the projects will need financing during their whole life-cycle and are not suitable for private financing. The main objective of Project Bond 2020 is to attract private investors to finance infrastructure projects and close the gap in infrastructure project s financing: [B]y providing credit enhancement to project companies raising senior debt in the form of bonds to finance infrastructure projects; the improved credit quality of the bonds will facilitate their placement with institutional investors Marguerite Fund (MF) equity financing The Marguerite fund is the European 2020 Fund for Energy, Climate change and Infrastructure. It is funded by Europe s leading public financial institutions. The fund is an equity investor and it aims to act as a catalyst in the development of Greenfield infrastructure in the Europe. The fund focuses mainly in new development in construction, portfolio of projects and retrofitting, modernization and capacity increase. Page 5/16

6 The Marguerite fund is a value-adding partner for developers because it has the ability to take construction and ramp-up risk, it has a strong experience in arranging project finance and it doesn t have immediate cash yield requirements during construction period. The Marguerite fund tries to reach geographical diversification in its total commitments; each member country may have a total commitment of 20%. In order to receive support from the Marguerite fund, the project should have a minimum of 65% total commitments in Greenfield. The core sectors of the fund are transport (TEN-T), energy (TEN-E) and renewables % of the fund s investments go to the core transport sector and the size of the funded projects should be over 200 million Euros Nordic Investment Bank (NIB) loans Nordic Investment bank has several loan products. Loans are made for projects that fulfil NIB's mandate to improve competitiveness and/or the environment: Corporate loans are the most common way of lending for NIB. Corporate loans are mainly targeted to NIB s member countries. Loan programmes are disbursed in several tranches through intermediates and they are granted for both member and non-member countries. NIB arranges also project and structured finance for projects that make a strong contribution to its mandate. Financing is provided in co-operation with other international financial institutions and with both public and private sector lenders. NIB may arrange financing in a form of non- and limited-resource project financing, structured loans for complex financings and leveraged borrowers, A/B loans, mezzanine financing through funds or private public partnership (PPP) financing. Sovereign loans Loans to municipalities Environmental loans which are provided via following lending facilities: Baltic Sea Environment Financing Facility (BASE) Climate Change, Energy Efficiency and Renewable Energy Facility (CLEERE) Environmental Lending Facility for member countries' neighboring area in Eastern Europe NIB may also provide guarantees 2.6. Nordic Environment Finance Corporation (NEFCO) NEFCO provides loans and makes capital investments with a mandate to improve the environment in areas that have an interest in the Nordic region. NEFCO s financed projects include a wide range of environmental projects in Central and Eastern European countries, including Russia, Belarus and Ukraine. Projects delivering cost-effective environmental benefits across the region are at the core of NEFCO's activities. NEFCO prioritizes projects that reduce releases of climate gases, improve the ecological status of the Baltic Sea or mitigate release of toxic pollutants, all of which are in the scope of clean shipping investments. Page 6/16

7 NEFCO's works with a large number (400) of small and medium-sized projects in different sectors. Cuntries of activity include Russia, Ukraine, Estonia, Latvia, Lithuania and NEFCO may also participate in projects in Belarus. NEFCO can participate in financing a project through (see also NEFCO s figure below): Subscriptions of equity and shares, i.e. becoming a partner in the project Medium and long-term loans and guarantees, which are usually provided on market terms. In some cases subordinated loans and loans with equity features may be provided. Often the loans are extended in addition to NEFCO's equity participation in the project BSAP Fund grants (legacy) The BSAP-fund is managed by NIB and NEFCO. The letters BSAP stand for Baltic Sea Action Plan and the aim of the fund is to support and finance the implementation of the Baltic Sea Action Plan by providing grants for technical assistance. The main target of the fund is to help to restore the ecological status of the Baltic Sea. The fund tries to facilitate and expedite the preparation of the bankable and viable project. Both public and private bodies may receive a grant from the fund. The main funding sectors are agriculture, wastewater treatment, shipping and ports and in general the reduction of hazardous waste in the Baltic Sea region. The fund awards grants for the following: Expenditures for project preparation and development, including feasibility studies, development of business ideas, and cash-flow models Technical assistance for institutional support, that is, training and support needed for project preparation, development and implementation Improving efficiency and quality in project implementation through, for example, supporting the acquisition of equipment for demonstration purposes. Page 7/16

8 At the time of writing, the BSAP fund grant has committed its funds and is no longer accepting new funding proposals Northern Dimension Partnership on Transport and Logistics (NDPTL) Support Fund grants The Northern Dimension Partnership was established in year 2009 within the framework of the Northern Dimension Policy. North-west Russia, Kaliningrad, the Baltic and Barents Seas, as well as the Arctic and Sub-Arctic areas are the main geographical focus for the Northern Dimension. The current members of the NDPTL are Belarus, Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Norway, Poland, Russia, Sweden and the European Commission. NDPTL will facilitate and assist in the implementation of major infrastructure projects by providing help in project preparation phase in order to stimulate investments within the Northern Dimension region. Another task for the Partnership is to serve as a regional forum for transport and logistics issues, and develop the already existing cooperation structures. The main objective of the Partnership is to improve major transport connections and logistics and take in to account the ecological needs of the region at the same time. NDPTL support fund provides direct grants for the following purposes and can finance up to 50% of the total project cost. Technical assistance for institutional support with regard to capacity building for project feasibility, development, preparation and implementation. Assistance to project development and preparation, in particular with a view to draw upon available financing from international financial institutions, as well as other banks, private initiatives or public parties (including EU funds), or otherwise enhancing the projects potential to mobilize resources for implementation. Assistance to improved efficiency and quality in project implementation. Nevertheless grant contributions can also be used for co-financing investments in preparatory works, services and/or infrastructure. Such cases are subject to a decision of the Assembly of Donors on a case-by-case basis European Bank for Development and Reconstruction (EBRD) The main task of EBRD is to promote the transition to market economies. European Bank for Reconstruction and Development has 63 member countries and also the European Union and the European Investment Bank are participating. The EBRD co-operates with other international financial institutions such as the World Bank. European Bank for Development and Reconstruction provides financing for projects that couldn t gather financing from another source on similar terms. EBRD provides project financing for banks, industries and businesses and also for publicly owned companies in a form of loan and equity finance, guarantees, facility leasing and trade finance. Direct investments for projects range from 5 million Euros to 230 million Euros. The financing rate is up to 35% of the total project costs. EBRD may consider participating to the financing if the project is located in an EBRD country Page 8/16

9 of operations, it will be profitable in the future and the project sponsor have significant equity contributions in cash or in kind. The project should also benefit the local economy and satisfy both EBRD's environmental standards and those of the host country. The EBRD supports projects in 29 countries. In the Baltic Sea region Poland, Lithuania, Latvia and Estonia can benefit from EBRD finance EU financing sources These financing sources are targeted primarily at EU beneficiaries, with some possibilities for participation from neighbouring countries. Each financing mechanism makes its own decisions on a case-by-case basis Connecting Europe Facility The Connecting Europe Facility (CEF) finances projects which create the trans-national European infrastructure in energy (TEN-E), transport (TEN-T) and digital networks. CEF is a combination of EU funds, including cohesion funds, and has around 26 bn for transport infrastructure in the period The CEF will also promote cleaner transport modes and facilitating the use of renewable energy. CEF has a large allocation for the Motorways of the Seas, with an expected emphasis on clean maritime transportation. The CEF also aims at better mobilising private financing. Innovative financial instruments such as guarantees and project bonds central elements to gain maximum leverage from this EU funding injection. From a transport infrastructure funding perspective, the CEF supersedes the TEN-T grants. The CEF financing for transport links will be primarily targeted to the new TEN-T core network and its core corridors (about 80%). This may imply a relative emphasis in committed financing on the transport connections between ports that are nodes of the core network and its core corridors. For the Motorways of the Seas, the funding rate will be higher than under the TEN-T grants, 30% for actual investments and 50% for studies including certain piloting activities Horizon2020 Horizon2020 is the EU financial instrument implementing the Innovation Union, combining previously separate research and development programme with the innovation programme. Horizon2020 has nearly 80 billion of funding available over 7 years (2014 to 2020). It is also expected to attract private investment to RTDI. Page 9/16

10 The goal of Horizon2020 is to ensure Europe produces world-class science, removes barriers to innovation and makes it easier for the public and private sectors to work together in delivering innovation. The Horizon2020 has as its focus area e.g. Mobility for growth, which has as one of its stated objectives the development of new technologies for very-low emission vehicles and vessels. The 2014 budget for the focus area is 375 M. The theme Smart, green and integrated transport has an allocation of 540 M for 2014 calls Regional Development Fund (ERDF) & Cohesion Fund As part of the European Union regional policy, investments in the period in the regions will be a total of 347 billion Euros and about 82 billion Euros will be spent on transportation. During the budget period investments to transport sector were concentrated to the Convergence regions. The Commission negotiates and approves development programs and is in charge of allocating resources. It is member states responsibility to manage the programs and select projects which are funded. Member states also control and asses the projects. The Commission monitors the program and pays out approved expenditures and verifies the control system. With the policy EU tries to reach three objectives: Convergence Regional Competitiveness and Employment European Territorial Cohesion EU is trying to solve the problems in all the three sectors with European Regional Development Fund (ERDF). The Cohesion fund was founded in order to improve the Convergence at EU. The European Social Fund concentrates on Convergence and Regional competitiveness and Employment objectives but it doesn t support infrastructure or transportation projects. The biggest problems in the Baltic Sea region are in the field of Convergence and Regional Competitiveness and Employment. The south coast of the Baltic Sea (some parts of Germany, Poland, Lithuania, Latvia and Estonia) may receive grants from the EU in the field of Convergence. The Scandinavian part of the BSR (Finland, Sweden and Denmark) is a territory which may receive support under the priority of Regional Competitiveness and Employment. The Eastern part of Finland is also a part of the phasing out region; it may get phasing out assistance. The third priority, European Territorial Cohesion, covers the whole European Union and it is implemented with Cross-border co-operation program, Transnational co-operation program and Inter-regional co-operation program. The ERDF, Cohesion and ESF programmes for the budget period are being developed and the first calls for funding for many programmes in the Baltic Sea Region are expected at the end of In the new programme, the involvement of the private sector as a beneficiary of the funding is expected to be easier than in the previous programmes. Page 10/16

11 EU SBSR seed money facility The EU Strategy for the Baltic Sea Region (EU SBSR) has a new seed money facility. The purpose of the facility is to accelerate the preparation of projects that explicitly address challenges listed in the Action Plan to the EU Strategy for the Baltic Sea Region. A successful seed money project is expected to result in an application to any of the EU or national funding sources e.g. the European Structural & Investment Funds programmes The seed money projects are expected to act in close collaboration with the priority area coordinators of the EU SBSR. The grant amount may vary between , in certain cases with feasibility studies up to with a co-financing rate of 85% Legacy EU instruments TEN-T grants Funding for the the Trans-European transport (TEN-T) network aims to promote territorial cohesion and economic growth. The TEN-T program is founded and managed by European Commission (DG Move) which defines the policy and takes all the financing decisions. TEN-T finances a number of topics with maritime relevance, most importantly the Motorways of the Sea and the Marco Polo programme. Motorways of the Sea (MoS) is a major funding category in the European Union s TEN-T programme. MoS grants support for maritime transport infrastructure for transport connections between two EU Category A ports. A particular focus in recent calls has been the remediation of the impacts of IMO Annex VI regulations, i.e. the sulphur directive. The TEN-T programme includes also other elements that have relevance to maritime transportation, e.g. innovation and innovative financing elements. The last call of the TEN-T programme is currently open for infrastructure investments and pilots that can be completed by the end of events/events/2013_ten-t_info_day.htm Marco Polo grants Marco Polo is a programme to support private sector transport services, which transfer freight from road to other transport modes. It provides funds to transport service operators based on the actual freight moved from road to any other transport mode, including water, air and railways. The overall budget for year 2013 is about 60 million Euros and the budget for the whole budgeting period is 450 million Euros. The last published Marco Polo call was closed in August Page 11/16

12 4. National mechanisms National mechanisms for direct public support to companies operating in the market is strictly controlled within EU, and by international agreements more broadly. Many national mechanisms have long histories and differ country by country. Some clean shipping related examples from the Baltic Sea Region are highlighted here State aid There is a large number of shipping-related state aid schemes in place. Those include e.g. innovation aid to shipbuilding industry, and are not listed here in detail. As a clearly clean shipping related element, the European Commission approved in January 2013 the use of state aid to encouraging the maritime industry to adapt to stricter environmental rules ahead of their entry into force. So far only Finland has taken advantage of this possibility. According to the EU decision, The eligible costs are defined in accordance with the provisions of the Environmental guidelines as the extra investment costs necessary for reaching a higher level of environmental protection than the level required by European Union standards, or, in the absence of such standards, as costs that are necessary for reaching a higher level of environmental protection than the level required by national legislation. Furthermore, in line with the provisions of the Environmental guidelines, eligible costs must be calculated net of any operating benefits and operating costs related to the extra investment for environmental protection and arising during the first five years of the life of the investment concerned. This type of state aid has proven successful for newbuilds, however when applied to retrofits the scheme has yet to prove itself Norwegian NOx fund The Norwegian NOx fund is an interesting example of a financing mechanism, which implements overall emission reduction measures in a cost-efficient manner through a redistribution within the private sector. Although the money granted by the fund is reallocated within the private sector, the NOx fund is nevertheless considered to be a state aid measure. This is because an agreement with the government is needed for the reallocation through the NOx fund, as an alternative to a state-imposed tax or levy which would reach the same goal but with higher overall costs. The Norwegian NOx fund has been highly innovative and successful in reducing NOx emissions from shipping, however its model has proven so far not been translated to other countries. Page 12/16

13 5. Merging Private and Public financing, special purpose vehicles In the EU funding, one of the important aspect is leverage. The role of private financing has increased at the current economic situation and infrastructure projects need more private investments. Member states governments have encouraged the private sector to participate in infrastructure financing by privatization, through concessions or now days even more using PPP model, public private partnership. For example in TEN-T financing, the EU support is approximately 20% in works and 50% in studies; the rest of the budget must be covered with other financing sources including private financing. Public-Private Partnership is a generic term for the relationships formed between the private sector and public bodies often with the aim of introducing private sector resources and/or expertise in order to help provide and deliver public sector assets and services. The term PPP is, thus, used to describe a wide variety of working arrangements from loose, informal and strategic partnerships, to design build finance and operate (DBFO) type service contracts and formal joint venture companies. Source: European Investment Bank, The EIB s role in Public-Private Partnerships PPP models are often built using project finance. In project finance the legally and economically self-contained project gets loan against its cash-flow. PPP structure can be a project within the company, using corporate debt or it can be set up as a Special Purpose Vehicle (SPV), an independent project which is managed by a sponsor, an equity investor. If PPP is constructed using SPV the transaction costs are relatively high, but with SPV it is easier to raise long-term financing for large projects. It is also less complicated to raise debt instead of equity. SPV is a safe choice because the problems of the PPP-project don t affect the whole company and when properly structured, vice versa. The financing source of the project changes during the project s life-cycle, at the beginning the project is financed using equities and bank loans. When the project is at the operational phase it is financed with long-term bonds because bondholders may control only issues that have an impact to the cash flow, but banks are allowed to monitor and control the behavior of the company in general. Page 13/16

14 6. Deployment of financing Financing for large construction projects often comes in small pieces from different sources. Financing sources and institutions can be seen as tools. It is wise to consider carefully in every project which tools are best for the specific project. Not all the financing sources can be applied at once and it is important to take into account the EU legislation that denies cumulative EU financing. Sometimes the application process for EU grants or other financial support is too complicated and time consuming when it would be is easier to finance the whole project with private money. All applications and application processes are not successful but the preparation of an application demands time and resources. Loans are also a part of a project s finance arrangements, and commercial banks and investment banks such as NIB and EIB are the main lenders. Organizations, which are familiar with EU and other public financing instruments, are useful in piecing the financing together. The tables below illustrate a strategic positioning of the different public financing instruments mentioned in the previous sections 1) in the balance sheet of the investment (different tables below) 2) in the investment lifecycle (horizontal axis where applicable) The project-specific financing strategy needs to be tailored on a case-by-case basis to match the actual investment preparation process and its schedules, as well as the schedules of the financing mechanisms Grants Investor RTDI, feasibility, demonstration Construction Operation Ship owner, newbuilding MoS, CEF, H2020, NEFCO CEF, MoS, State aid, (Marco Polo) Ship owner, retrofit MoS, CEF, H2020, NEFCO CEF, MoS, State aid (Marco Polo) Ship owner, pilot projects H2020, ERDF, CEF, MoS, NDPTL-SF, NEFCO CEF, MoS, State aid (Marco Polo) Shipyard (newbuild) (ERDF,) H2020, NEFCO, State aid State aid Page 14/16

15 Ship repairyard ERDF, H2020, NEFCO, State aid State aid Manufacturer of abatement technology ERDF, H2020, NEFCO, MoS, CEF MoS, CEF Port H2020, ERDF, MoS, CEF, NDPTL-SF, EUSBSR-SMF ERDF, MoS, CEF (Marco Polo) 6.2. Equity New equity may be needed for example if the investment project is implemented through a Special Purpose Vehicle (e.g. a dedicated company), or forms the basis of a new venture. Market-based equity investors typically expect a return of around 10% for their investment to compensate for the risk of the investment. The willingness of listed equity investment mechanisms to invest in a specific project depends on their mandate and the properties of the project. In practice most of the equity is served by the equity market. EIB and NIB finance intermediaries, who in turn provide equity to the projects. Those mechanisms are not listed here, nor are e.g. the share issue mechanisms of listed companies Investor Financing mechanisms 2 Ship owner, newbuilding Ship owner, retrofit Ship owner, pilot projects Shipyard Ship repairyard Manufacturer of propulsion abatement technology Port NEFCO, EBRD NEFCO, EBRD NEFCO, EBRD NEFCO, EBRD NEFCO, EBRD NEFCO, EBRD NEFCO, MF, EBRD 6.3. Debt Debt instruments are most relevant during the construction stage at either project or company level, to some extent also in company-level RTD. The minimum size of loan for projects varies, being e.g. less than 5 M for NEFCO, roughly 10 M for NIB and 25 M for EIB. The public debt investment mechanisms expect market-based returns (on par with the long-term market interest rates + risk-based margin), but often offer longer maturities for the debt than private investors to projects which have a conservative risk profile. Here we list only 2 Note NEFCO s and EBRD s countries of operation Page 15/16

16 debt mechanisms provided by public financing institutions, commercial banks and specific shipping banks have their own contributions to the debt market and in some cases, are willing to take higher risks than those listed here. Investor Ship owner, newbuilding Ship owner, retrofit Ship owner, pilot projects Shipyard Ship repairyard Manufacturer of propulsion abatement technology Port Financing mechanisms NEFCO, EBRD, NIB, EIB, PB NEFCO, EBRD, NIB, (EIB,) NEFCO, EBRD, (NIB, EIB, PB) NEFCO, EBRD, NIB, EIB, PB NEFCO, EBRD, NIB, EIB, PB NEFCO, EIB, NIB EBRD, EIB, NIB, PB 6.4. Structured finance Many of the international financing institutions (e.g. EIB, NIB) also offer structured financing (SF), e.g. mezzanine finance, project derivatives etc. in the fields of transport and energy. The LGTT is a specific example of an innovative mechanism in structured finance, which has been successfully tailored for transportation sector needs. The mixing of different financing solutions from public and possibly private sources requires experience with the financing mechanisms. Expert advice is available for this purpose. 7. Conclusions The message from the financing sector, both public-owned institutions as well as private financing, is clear: there is more financing available than there are well-prepared, viable projects. The summary in this brief paper also illustrates the abundance of public financing mechanisms. In particular, the financing mechanisms applicable for grants for RTDI, including feasibility studies and piloting for commercialization, are numerous. However, the full utilization of the public financing sources, be it grants, debts or other types of instruments, requires knowledge of the instruments and in some cases, specific experience in proposal preparation for those instruments. Attention also needs to be paid to fit-for-purpose financing structures along the investment lifecycle, from feasibility studies and piloting to decommissioning costs. The project preparation through the investment lifecycle, including financial and business model innovation, is clearly a bottleneck in unleashing the investment potential in the form of a the pipeline of financed projects for clean shipping. Page 16/16