On 24 Nov 2021, we participated in an online panel discussion organised by Ship Management International and sponsored by Columbia Shipmanagement. Facilitated by Sean Moloney, Managing Director at Elaborate Communications, he was joined by panellists including:
- Joshua Politis, Deputy Managing Partner of Transport Capital
- Demetris Chrysostomou, Managing Director Asia Region of Columbia Shipmanagement
- Caroline Yang, President of Singapore Shipping Association
- Arjun Batra, Group Managing Director of Drewry Shipping Consultants
- Steen Lund, CEO of RightShip
In case you missed it, here are some of the key takeaways highlighted in the discussion.
New Sources of Capital to Drive Decarbonisation
We are seeing new capital which has not historically been necessarily interested in the industry, but are now thanks to their focus on impact or ESG. It is still early days but there are interesting projects that are attracting this kind of new capital. Although Europe is currently dominating this space, Singapore has been doing a lot on that front including developing green finance programmes. As one of the biggest ports and bunker suppliers, Singapore has a huge role to play and this has been accelerated tremendously. There has been an exit of capital in ship finance in the last 10 years, but there is a huge opportunity now to grow that back with ESG/impact-focus to getting capital for lower emissions vessels.
Explaining further, Joshua Politis said: “I think a focus on ESG would be a minimum (for companies) to attract capital. You are already seeing in offshore oil and gas how it is exceedingly difficult to attract capital. Now with the Poseidon Principle (that is really targeted at the largest of shipowners with strong balance sheets), you are already at the case where there is no capital if there’s no effort on the ESG front. Not that the capital is better priced, it’s just no longer available.”
He added that it’s also about different sources of capital for the small and medium-sized shipowners. The banks are not going to come back but there are new sources of capital. However, the new capital would be focused on retrofits or bringing those (older) ships to be able to reduce its emissions. As for new ships, it will be for future-looking technologies.
Digitalisation To Draw Talent
In the last 18 months, the Singapore government has done a lot to digitalise our maritime sector including digitalising port infrastructure and maritime services. There is also the maritime decarbonisation centre and PIER 71 which comprises of three components/ activities: Smart Port Challenge (SPC), 8-week acceleration phase and ecosystem building.
Sharing her sentiment, Caroline Yang, President of Singapore Shipping Association noted: “There is excitement to what the future brings, and this would hopefully also bring talent and companies. They won’t necessarily be maritime companies but also technology companies that would provide solutions.”
