There is still an appetite for financing the stronger port projects going forward, but banks and equity providers will be more cautious towards projects with higher risk profiles, says Karsten Saethre, associate director specialising in shipping, offshore and logistics at DnB NOR''s London branch.
"Both debt and equity providers will have stricter requirements in terms of risk, tenors, etc., and the cost of capital in general has increased significantly." He says there is still a high level of requests for funding but there are signs of the activity slowing down as terminal operators reduce new investments due to lower economic growth expectations and the higher cost of capital.
DnB NOR is primarily a "relationship bank" targeting the major operators of ports and terminals. Mr Saethre says the main characteristics of port projects are the right location with a natural market demand or throughput guarantees, an experienced and financially solid sponsor, satisfactory political risk, "and we need a good understanding of the technical risk where relevant, including everything from quay wall to draught restrictions and the capability of the superstructure".
"As an Equator Principle bank, we do make careful consideration of the social and environmental consequences where relevant."
DnB NOR's strategy remains the same as before the financial downturn, he says, "as we are a long-term player in this industry focusing on our relationship clients".
Among the deals done by DnB NOR this year, a highlight was its role as joint arranger, underwriter and bookrunner for the acquisition of Vopak Terminal Bahamas, a large oil terminal acquired by Vopak and First Reserve from PdVSA.
Although primarily covering leading operators of container terminals and liquid bulk terminals worldwide in recent times, DnB NOR is also expanding into ro-ro and bulk terminals, says Mr Saethre.
