Value Maritime ECGS solves main problem when financing a scrubber.
How to finance a scrubber?
Installation is not the only challenge when it comes to retrofitting a scrubber on an existing vessel, there is also the issue of financing.
With a serious price tag and traditional sources of ship financing becoming harder to come by, exhaust gas cleaning systems (EGCS), commonly known as scrubbers represent a tricky-to-fund line item on the books of many shipowners and operators.
Three main problems in financing a scrubber for a vessel:
Inability to obtain security interest in the scrubber:
One of the main problems faced by small shipowners when trying to get financing is the inability of a lending bank to obtain any security interest in the scrubber when there is an existing mortgage on the vessel. This is because once the scrubber is installed it becomes part of the ship, or at least an “appurtenance”, and is therefore subject to the existing first mortgagee’s lien.
With the plug and play scrubber from Value Maritime, this problem does not exist as the Scrubber does not become part of the ship. The container including scrubber and all monitoring and control equipment can easily be placed and taken off from a vessel and be used on another vessel. The scrubber can therefore be pledged and financed separately from the current vessel financing.
The Charter / Owner dillema:
In the case where there is a Shipowner / Charter relation, it is often the charter party that pays the bunker. So there is a dilemma on who pays for the scrubber and who profits from it. In addition a charter contract is often shorter that the payback time from the scrubber.
The fact that the Value Maritime scrubber can be financed separately from the vessel, and that it can be taken off and placed on another vessel or sold, means that there are more options for shipowners and charter parties to solve this dilemma. For example, the owner of the scrubber no longer has to be the shipowner. It can be the charter party or a leasing party who buy the scrubber themselves.
Of course there will still be installation costs to prepare the vessel and place the scrubber; but thanks to the Plug and Play system these costs are limited. (Eur 150,000-200,000)
Investing in older vessels:
When a ship has just a few years left, owners are less than willing to invest in conventional scrubber retrofits. There is less payback time for investment of the scubber installation. It may be more economical, to switch to more expensive marine gasoil. This unfortunately leads to an increase in costs thus, further shortening the economic horizon for the vessel. It may even lead to more vessels being scrapped before their normal lifetime. Which is a waste of resources.
Value Maritime plug and play Scrubber Unit also tackles this issue as it can be sold or placed on another vessel when the “Old vessel” needs to be taken out of service.
Our all-inclusive modular concept supports financing arrangements independent from the present ship’s financing. Thus, making even leasing for our maritime scrubber a viable and interesting option. For example, we have just signed a deal with Beequip as one of our leasing partners.
Lastly, we would like to mention that thanks to the standardisations and simplicity of the plug and play system we have developed, the total cost for the scrubber system including installation is far lower than that of other existing scrubber retrofits. Our payback times are therefore also very favourable.
For more information on pricing and financing options for our Value Maritime Scrubber system
Source : Value Maritime – June 06 2019.