Abu Dhabi Islamic Bank (ADIB) announced on March 28 the closure of a Sharia-compliant syndicated transaction totaling $235 million (AED865 million) with Dubai-based BGN and ADX-listed Al Seer Marine to finance new energy-efficient gas carriers.
The financing, conducted by ABGC DMCC, a joint venture (JV) between Al Seer Marine and BGN, marks the second tranche of a larger syndication amounting to $370 million.
It will finance the construction of three gas carriers in South Korea and Japan, the UAE’s state-owned Emirates News Agency (WAM) reported on March 28. Two vessels are expected to be delivered in 2025, and the third in 2026.
In a bid to reduce greenhouse gas emissions, the vessels will be designed to be dual-fuel efficient through their Liquefied Petroleum Gas (LPG) engines.
ADIB acted as the deal’s Mandated Lead Arranger, coordinator, book-runner, Shari’a advisor, and investment and security agent. ADIB was further supported by the Abu Dhabi Commercial Bank (ADCB), the National Bank of Fujairah (NBF), the Commercial Bank of Dubai (CBD), and the Islamic Corporation for the Development of the Private Sector (ICD).
The three VLGCs are understood to be under construction by HD Hyundai Samho (formerly Hyundai Samho Heavy Industries) of South Korea and Kawasaki Heavy Industries of Japan for the construction of two and one respectively, to be delivered in 2025 and 2026. Both orders were signed in February 2023 and have an order value of approximately $197.1 million and approximately $90 million, respectively.
Currently, BGN has been busy increasing the tonnage of its modern VLGCs to facilitate the trade of liquefied petroleum gas (LPG), ammonia and other commodities. Earlier this year, BGN placed an order with South Korea’s HD Hyundai Heavy Industries for two 88,000 m3 VLGCs, in a deal valued at about $236 million, with delivery expected in November 2027.
In June and October 2023, ABGC DMCC has taken delivery of two newbuilding VLGCs “Lucky Gas” and “North Gas” from HD Hyundai Heavy Industries and signed a 10-year charter agreement with BGN International.
The VLGCs are 230 meters long with a cargo capacity of 84,326 m3 and are equipped with the latest technology to minimize drag and achieve optimum efficiency performance. The dual-fuel design allows for conventional marine fuels and alternative fuel LPG, thus reducing CO2 emission intensity.