Wavefront (Portfolio 8)
As a result of environmental concerns regarding
the effects of commercial vessels transferring
ballast water around the world, in 2016 the
International Maritime Organisation (IMO) made
it mandatory for every vessel over 400GT to be
fitted with an IMO approved Ballast Water
Management System (BWMS) from 2024.
Under the terms of the contract for Portfolio 8,
SOLO is partnering with a shipping and marine
finance specialist who has developed relation-
ships with Original Equipment Manufacturers
(OEMs) to provide new BWMSs.
Along with this, SOLO may also fund other
marine equipment including exhaust gas cleaning
systems or scrubbers, which are used to remove
particulate matter and harmful components from
the exhaust gases generated as a result of
combustion processes in marine engines.
Each transaction is being co-underwritten by LCM
with the partner typically entering into a financing
lease with the lessee which fully amortises over a
36-month period.
Overview
This partnership tackles the main issue with ballast water where non-local
sediments and microscopic organisms are transmitted into the water of their
destination port. This could cause native species to become extinct, potential
negative effects on public health and impact local biodiversity. As trade has
increased, the volume of ballast water has grown significantly and so is an
increasingly important area.
The utilisation of filtration systems, which the IMO have made a legal requirement,
protects marine life. SOLO provides the financing which enables ships to be properly
equipped as the BWMS reduces marine pollution and focuses on preventing water
pollution.
With our oceans covering two-thirds of the world’s surface and the greatest number
of marine creatures living in coastal areas, this is a critical aspect of marine
management. International Maritime Organisation (IMO) research states that 80%
of world trade is carried by ships and 10 billion tonnes of ballast water are
transported per year which would fill 4 million Olympic sized pools.
The IMO emphasises the importance of utilising BWMS systems as 7,000 species
are transferred in ballast water every hour of every day and there is one new
invasion every 9 weeks.
Example of what BWMS can prevent - Asian Kelp (Undaria pinnatifida):
•
Better known as wakame, this edible seaweed is commonly used in Japanese
and Korean cuisine
•
While native to cold-water coastal areas of Japan, Korea, and China, it has found
its way to New Zealand, France, Great Britain, Spain, Italy, Argentina, Australia,
Mexico and the US
•
Asian Kelp’s rapid growth and large size means it competes with native sea-
weeds for space and light, changing the local marine ecosystem
•
Aggressive measures are underway to remove the plant from harbours on the
western seaboard of the USA
KPIs
Capital deployed
€4,382,095
Total number of ships with a BWMS fitted
Number and sizes of ballast tanks funded during the period
1 x 600 cbm/h
5 x 1,000 cbm/h
Total number of Ballast Water Management Systems (BWMS) funded
6
% of customers set to meet D2 standards by 2024
100%
Ship documentation - % Management Certification
100%
Ship documentation - % Ballast Water Management plan
100%
Ship documentation - % Water Record Book
100%
Number of exhaust filters financed
Total number of ships with an exhaust filter fitted
Adherence to LCM’s Exclusion Policy
Yes
UN SDG Alignment:
LCM has assessed Portfolio 8 for alignment with the UN SDGs. This investment is
aligned with the following:
LCM Partners SOLO VII SLP | ESG Report | 07
SDG 14: Life Below water
14.1 Prevent and significantly reduce marine pollution of all kinds
Key Performance Indicators (KPIs)
LCM Partners SOLO VII SLP contributed to the financing of six Ballast Water Management Systems during the period.
•
This carries a total of 5,600 cbm/h of ballast water and is broken down as follows:
O 1 tank with a capacity of 600 cbm/h
O 5 tanks with a capacity of 1,000 cbm/h
•
Importantly, 100% of customers are set to meet the D2 standards set by the IMO, which specifies the maximum amount of viable organisms allowed to be
discharged, including specified indicator microbes harmful to human health.
•
No exhaust filters were financed during the period.