The challenge

SITC needed to arrange bank financing for two new 2400 TEU¹ container ships, featuring high fuel efficiency and an eco-design with low emission, which had been ordered from Yangzijiang Shipbuilding Group.

SITC wished for any finance to be in line with its environmental and social governance (ESG) philosophies. As an integrated logistics service provider in Asia, SITC has upheld the business principle of being a responsible enterprise and the tenet of balancing business development with corporate social responsibilities.

Striving to incorporate the sustainable development idea in the day-to-day operation and major commercial decision making, the company has been committed to creating a long-term value for shareholders, customers, employees, supply chain partners and the public and bringing a positive impact.

The solution

The chosen bank structured a ten-year US$80.8m senior secured shipping finance facility to SITC to finance its new vessel purchasing plan including the two container ships. Furthermore, the bank acted as the sole mandated lead arranger, lender, agent and security agent, hedging provider and account bank in this solution.

Best practice and innovation

The finance chosen by SITC is provided by a bank which supports sustainable development by deploying banking assets to this green project.

This is demonstrated in the bank’s commitment to promoting economic and social development in the markets it serves, doing so sustainably and equitably in line with their purpose and three valued behaviours: ‘Never settle’, ‘Better together’ and ‘Do the right thing’. This sustainability philosophy sets out how they integrate sustainability into their organisational decision-making. Supporting sustainable and responsible growth, including delivering the UN Sustainable Development Goals (‘SDGs’), represents a significant opportunity.

The financing facility helps SITC continue its journey to reduce greenhouse gas (GHG) emission and energy intensity per TEU.

Key benefits

• This funding facility to SITC allowed it to improve its environmental and sustainability credentials via the calibre of the vessels.
• These two new container ships with a capacity of 2400 TEU feature about 20% lower fuel consumption compared with old models. New technology employed by these ships can also reduce 36,000 tons of CO2 emission each year.

Modern container ships have an average lifespan of 25-30 years, therefore each newly-built vessel will have a long-standing impact.

This solution is fully in line with SITC’s continuous commitment to sustainable development. The deal significantly reduces the carbon footprint of SITC.

“This aligns with the 13th Sustainable Development Goal by the United Nations, which calls for taking urgent actions to combat climate change and its impacts. Further, it enhanced our capacity as a major intra-Asia liner, who is the leader in inter-model transportation, driving sustainable industrialisation, supporting the 9th Sustainable Development Goal by the United Nations,” concludes Yang Xianxiang, CEO.