K Line unveils its 2nd transition linked loan

Japanese shipping major Kawasaki Kisen Kaisha (K Line) revealed plans to finance its transition linked loan (TLL) at the end of September 2021.

The carrier has formulated a “Transition Linked Finance Framework” which is based on K Line Environmental Vision 2050.

The loan with Mizuho Bank and Mizuho Securities will be financed using this framework, the company said. The amount and the term are yet to be disclosed.

In order to promote the transition linked finance, K Line has got the certification of “Basic Guidelines on Climate Transition Finance” by the Ministry of Economy Trade and Industry and related guidelines and policies for this TLL by Japan Credit Rating Agency, Ltd. (JCR).

This TLL is the company’s second transition finance since the 1st transition loan in March 2021.

In March 2021, the company announced it secured an operating lease for the LNG-powered car carrier named Century Highway Green through climate transition loan with Mizuho Bank and Sumitomo Mitsui Trust Ban.

This JPZ 5.9 billion ($ 54 million) loan was recognized as the very first climate transition finance in Japan.

K Line said it is the first company to initiate two consecutive transition finances in short term in Japan.

“We believe these finances contribute to decarbonization,” K Line noted.

The shipping company is accelerating the initiatives toward minimizing all environmental impacts generated by its business activities. In the roadmap, as 2030 interim milestones, K Line set CO2 emission efficiency improvement by 50% over 2008, which is beyond IMO target of 40%, and pursuance of transporting and supplying new energy for a low-carbon society.

The TTL is also said to be part of K Line’s activities that contribute to the UN Sustainable Development Goals.