The European Investment Bank (EIB) has signed an agreement with Dutch financial institution ING to provide €300m in funding to support green investments in the European shipping sector.

ING and EIB will each provide €150m to the financing facility as part of the deal, which will be made available to clients with significant European interests.

The facility can be used to fund projects that feature an environmentally friendly element such as the construction of new vessels, or the retrofitting of existing vessels to improve their fuel efficiency and environmental performance.

"Climate action is one of the EIB’s top priorities, and this type of financing should be seen as an incentive for shipowners to consider doing things differently."

Interested parties will be encouraged send their project proposals to ING, where they will be subject to the company’s financial and non-financial risk acceptance criteria.

EIB is expected to invest the €300m in the facility on a gradual basis over the next three years, while ING’s shipping team will be responsible for leading and managing the initiative.

The agreement forms part of the Green Shipping Guarantee (GSG) Programme, which is supported by the EU’s Connecting Europe Facility (CEF) Debt Instrument and the European Fund for Strategic investments (EFSI).

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It is expected to benefit from the European Fund for Strategic Investments (EFSI), the core part of the Juncker Plan.

EIB president Werner Hoyer said: “I think it’s no secret that the shipping sector is a major contributor to CO2 emissions.

“Climate action is one of the EIB’s top priorities, and this type of financing should be seen as an incentive for shipowners to consider doing things differently.

“The facility was set up after numerous discussions with Dutch counterparts from the public and private sector, and aims to help the shipping sector transition to a greener future.”

ING intends to leverage the latest agreement to achieve parts of its wider sustainability strategy, which aims to facilitate and finance a societal shift to sustainability in the environmental, economic and social fields.