The Global Centre for Maritime Decarbonisation (GCMD), AIM Horizon Investments and partners have announced the successful closing of the Fund for Energy Efficiency Technologies (FEET), securing total commitments of up to US$ 35m, exceeding its initial target.
As the first fund for vessel retrofits leveraging a pay-as-you-save repayment mechanism, FEET directly addresses the long-standing financial barriers hindering the sector’s uptake of vessel retrofits. This fund has drawn strong interest from across the maritime value chain, including equipment manufacturers, shipowners, and investors.
GCMD provides catalytic equity and is FEET’s appointed decarbonisation advisor. FEET is managed by AIM Horizon Investments, a Singapore-based fund manager specialising in maritime and aviation funds for institutional and accredited investors. The Development Bank of Japan (DBJ) holds the preferred equity position. DBS Bank and ING (which acted as Coordinating Bank) have in principle agreed to provide senior debt financing.
Improving energy efficiency remains one of the most effective strategies to reduce emissions and fuel costs. Energy Efficiency Technologies (EETs), such as wind-assisted propulsion systems (WAPS) and air lubrication systems (ALS), can deliver immediate fuel savings, assisting shipowners to stay competitive amid tightening regional carbon regulations. However, even with a retrofit market valued at over US$ 20bn, uncertainties around EET performance and access to financing are said to limit uptake. A primary difficulty restricting adoption is the inherently variable fuel savings from EET retrofits, which depend on operational and environmental factors, such as routing and weather conditions. The lack of standardised methodologies to accurately measure fuel savings further challenges uptake. This uncertainty has made the return on investment period difficult to predict and has exacerbated the split-incentive issue, where shipowners are expected to invest in retrofits whereas charterers realise savings.
A pay-as-you-save repayment mechanism addresses payback uncertainty with EETs by directly linking repayment to quantified and verified fuel and regulatory savings. Deploying this mechanism requires robust data collection and analysis to isolate the retrofit’s contribution to overall fuel savings.
FEET decouples retrofit financing from vessel mortgages by offering unsecured leases. Under this structure, FEET provides up to 100% financing for the equipment and associated installation and sensorisation costs, and leases the hardware to shipowners. In return, shipowners make repayments linked directly to verified fuel and regulatory savings. At the end of the lease, ownership of the EET is transferred to the shipowner for a nominal fee.
FEET is designed to scale beyond this initial closing, recognising the vast market size and shipping sector’s pressing decarbonisation needs. GCMD and AIM Horizon Investments are targeting to scale the fund to USD 500M by 2030, capable of supporting around 200 ships. Scaling FEET will create a virtuous cycle: as the fund grows in size and its projects diversify, financing costs will decrease, and richer performance data on EET will be generated. This, in turn, will spur further innovation and deliver greater benefits for shipping companies, investors and EET manufacturers.
Prof Lynn Loo, CEO, GCMD, said: “Bringing FEET to life has taken persistence and a willingness from everyone involved to step into the unknown. There was no playbook; our teams were learning as we went. This is exactly the kind of collaborative, problem-solving mindset needed to move the needle on maritime decarbonisation. My hope is that FEET will accelerate the uptake of shipboard energy efficiency solutions and help unlock the scale of action needed to turn the industry’s decarbonisation ambition into tangible progress.”
