- Japanese shipbuilder Kawasaki Heavy Industries (KHI) has established the Sustainability Linked Loan Framework Template.
- It is in accordance with the principles to set future targets.
- It is for the establishment of a hydrogen supply chain.
The template was established in accordance with the Sustainability Linked Loan Principles drawn up by the Loan Market Association and the “Green Loan and Sustainability Linked Loan Guidelines” issued by the Ministry of the Environment, Government of Japan.
The Loan Market Association was established in 1996 to improve liquidity, efficiency and transparency in the primary and secondary syndicated loan markets in Europe, the Middle East and Africa. For the template, Kawasaki has obtained a third-party opinion from the Japan Credit Rating Agency.
Furthermore, the firm has inked loan agreements with four lenders by using the template. Under the template, KHI has set a number of sustainability performance targets connected to the creation of a hydrogen supply chain. Specifically, the company wants to work on the commercialization of the construction of the first large liquefied hydrogen carrier by 2026.
The other target set under the new template is transporting 225,000 tons/year or more of liquefied hydrogen to Japan by 2031. Hydrogen is expected to be used as a clean energy source to realize a decarbonized society as its burning does not emit CO2. “By utilizing the Template, Kawasaki will not only promote its own sustainable finance initiatives…” KHI noted.
Group Vision 2030
Moreover, Kawasaki has set a sustainable finance target in its “Group Vision 2030” for 50 per cent of its long-term debt in FY2030 and 100 percent in FY2050. The establishment of the hydrogen supply chain is seen as one of the priority fields in its “Group Vision 2030”, and also essential for the sustainable growth of Kawasaki and the achievement of carbon neutrality in Japan.
In the past, the Japanese firm worked with Iwatani Corporation, Shell Japan, J-POWER, Marubeni, ENEOS, and Kawasaki Kisen Kaisha to develop technologies to produce and transport large volumes of liquefied hydrogen, conducting demonstration tests between Japan and Australia. Suiso Frontier, the world’s first liquefied hydrogen (LH2) carrier designed and constructed by KHI, completed its maiden voyage in April this year.
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