The construction of a marine vessel is a complex business, which can take several years to complete. To ensure it runs smoothly, Royal IHC works closely with customers to precisely assess a range of issues including product specifications, equipment requirements, and project timeframes. And with some vessels costing millions of euros, financing over a long period is also a major consideration. We want our customers to have confidence that financing is available when ordering materials and equipment, and committing personnel to a project.
Banking on success
Because of the expense and time required to build a vessel, banks are usually involved in the financing process. In addition to figuring out the total costs of a project, we work together with customers to create a suitable financing structure, which includes managing any potential risks.
So much can happen to both parties during a long-term project and one effective way to mitigate risk is to enter into an export credit insurance agreement. This form of security generates premiums that are much lower than they would be if a deal was provided directly by an insurance company.
Royal IHC has extensive experience in dealing with financial risks on expensive long-term projects, and fully understands that customers need to have confidence in all transactions. We have excellent contacts with banks and financing institutions, and understand the insurance issues. Our experienced and knowledgeable financing team is committed to doing business in a transparent way to put customers at ease.
Our designers and engineers also have a role to play as they develop accurate risk assessments for a project. Their understanding of data and ability to deliver accurate assessments can help to value and mitigate risk. Therefore, in addition to supplying vessels, we offer solutions to cover all aspects of a project.
Understanding customer needs
Helping a customer to understand and clarify their own needs also impacts on project financing. We can advise on what vessel and which equipment is most appropriate, allowing them to save time and money. For example, a customer may assume they need to purchase one of our Beaver® 65 vessels, but we might instead advise them to consider two Beaver® 30s, customised with specialist equipment. Or we could advise the customer to explore the benefits of an electrically powered Beaver® E vessel. Additionally, a vessel lease could be a better option for projects with a relatively short timeframe. We can help them make these decisions.
The future for the shipbuilding industry may hold some uncertainty, particularly for the offshore oil and gas sector as much of the world moves towards a zero-carbon future. However, more opportunities may open up in the sustainable energy markets, including offshore wind. Interest from investors and the availability of state-backed export credit insurance could boost financing for shipbuilding in this sector.
Whatever the situation, Royal IHC remains committed to helping customers make the right choices and get the best deals. Our complete package of support – combining engineering and financial know-how – will provide customers with confidence as they negotiate risk factors associated with developing costly, long-term projects across the world.
Get in touch and we will help you.