KOBC to Invest 120 Billion Won in Icebreaking and Ice-Strengthened Vessels to Build Arctic Route Fleet

Up to 30% of Vessel Price in Subordinated Financing;
Up to 90% LTV Including Senior Loans
Support for Both Newbuilds and Second-Hand Vessels;
No Restrictions on Vessel Type—Container, Bulk Carrier, Tanker, and More
Easing Initial Investment Burden for Domestic Shipping Companies;
Proactively Securing Polar Operation Fleets

Korea Ocean Business Corporation (KOBC) is launching an annual investment program worth 120 billion won to help domestic shipping companies secure icebreaking and ice-strengthened vessels required for Arctic route operations. The program will invest up to 30% of the vessel price as subordinated financing, enabling total funding—when combined with senior financing—to reach up to 90% of the vessel’s price.

According to KOBC on September 17, a new “Icebreaking and Ice-Strengthened Vessel Investment Program” will be established to support domestic shipping companies in building polar operation fleets. The intent is to reduce financial burdens so that domestic shipping companies can proactively secure necessary vessels ahead of anticipated growth in commercial operations along the Arctic route.

The Arctic route is drawing attention as a new maritime transportation corridor, enabling shorter voyage distances compared to existing major routes and thereby reducing logistics costs and transit times. However, polar operations require vessels equipped with icebreaking or ice-strengthened capabilities to break through or endure ice. The acquisition cost of such vessels is generally higher than that of conventional ships, and it is difficult for shipping companies to ensure profitability before the commercial route is fully established, thereby limiting their willingness to invest early.

To alleviate these concerns, KOBC will run the program at an annual scale of 120 billion won. Icebreaking or ice-strengthened class vessels—either newly built or acquired as second-hand—for the purpose of Arctic route service by domestic shipping companies are eligible for investment.

There are no restrictions on vessel type. The program covers a variety of vessels that can be deployed to the Arctic route, including container ships, bulk carriers, tankers, and pure car and truck carriers (PCTC).

The financial assistance will focus on subordinated investments. KOBC plans to invest up to 30% of the vessel price through subordinated financing. Shipping companies can combine this with senior financing to raise up to 90% of the vessel cost. For example, if a ship costs 100 billion won, as much as 90 billion won could be raised with external funds—significantly easing the company’s own capital requirements.

Subordinated financing, in particular, carries a higher risk because it is ranked lower in repayment priority than senior loans. By directly investing in this layer, KOBC can encourage private financial institutions to participate with senior capital, thereby providing a stabilizing effect on the overall funding structure for shipping companies.

Through this program, KOBC aims both to assist domestic shipping companies in securing icebreaking and ice-strengthened vessels and to proactively bolster the national fleet and polar operation capabilities in preparation for the expansion of Arctic route operations.

KOBC President Byunggil Ahn stated, “To establish the Arctic route as a new maritime logistics network, it is essential to ensure a stable operational foundation. Through this program, we will reduce the burden on domestic shipping companies in securing vessels, supporting them to respond proactively to the new opportunities presented by the Arctic route.”

This content was produced with the assistance of AI translation services.