GCMD and partners close FEET, the world's first pay-as-you-save vessel retrofit fund

The Global Centre for Maritime Decarbonisation (GCMD), AIM Horizon Investments and their partners today announced the successful closing of the Fund for Energy Efficiency Technologies (FEET), securing total commitments of up to USD 35M, exceeding its initial target.

As the world’s 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. Formerly known as FPG AIM Capital, AIM Horizon Investments is a Singapore-based fund manager specialising in maritime and aviation funds for institutional and accredited investors. Shareholders of AIM Horizon Investments hold the fund’s commercial equity position, while the Development Bank of Japan Inc. (DBJ) holds the preferred equity position. DBS Bank and ING (which acted as Coordinating Bank) have in principle agreed to provide senior debt financing.

A pay-as-you-save repayment mechanism addresses payback uncertainty with Energy Efficiency Technologies (EET)  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.

To this end, GCMD has undertaken EET performance pilots, equipping vessels with additional sensors to acquire high-precision, high-resolution data and applying rigorous data analytics to quantify fuel savings with statistical confidence. As more data is collected across diverse operating and environmental conditions, these datasets can be used to model and predict savings under varying scenarios.

FEET de-couples 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.

Blended financing and project diversification to manage risks

A blend of catalytic capital, commercial and preferred equities, as well as senior debt, allows FEET to balance financial risk while keeping financing costs competitive. By investing in a diverse portfolio of projects across technologies, manufacturers, vessel owners and types, FEET spreads investment exposure across its portfolio and enhances fund resilience.

Several projects have already been identified and have progressed to the final investment decision stage, reflecting strong industry interest and confidence. The fund remains open to shipowners and ship operators seeking support for adopting EETs.

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.

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Professor 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.”

ING says it is proud to have collaborated with GCMD and partners on the successful launch of a pioneering fund dedicated to financing the retrofitting of energy efficiency technologies (EET) on vessels. ING acted as Coordinating Bank for the senior debt financing.