Norton Rose Fulbright ship finance veteran Harry Theochari says that national governments must provide assurance to the industry through ECA support to help raise the money to finance shipping’s transition to decarbonisation.
Speaking to Jon Chaplin in a personal capacity on the GMS Podcast, the ship finance lawyer, now a senior consultant with his firm, asks “where are we going to find that kind of money?” “The fact of the matter is banks are financial institutions are not what they used to be…there is not enough money available to shipping right now from historical sources.”
Raising a question over Chinese leasing, until recently a popular form of capital raising with Greek shipowners, Mr. Theochari takes a cautious approach challenging podcast listeners if, in today’s political climate, they would want “to be reliant on Chinese money.”
Questioned on whether a role for Private Equity could be reprised, Mr. Theochari says the risks around fuel transition are too great to appeal to investors, likening the situation to the 1980’s choice between buying a Betamax or VHS. “I don’t think equity investors will be prepared to take those kinds of risks… why should I take the risk of going for methanol, or hydrogen or ammonia? I don’t think we’ll see much of private equity taking big positions in new disruptive technologies.”
Mr. Theochari believes that Governments should “step up” in support of the huge sums needed to get shipping to net-zero. “Banks will be there to lend if they know they’ve got government support” via export credit agencies. “I think governments are going to have to lead on this.”
In June this year, Mr. Theochari OBE was honoured by the Queen for his services to the maritime industry.
He sits on the Institute of Maritime Law Advisory Board at Southampton University and is the Chair of Maritime London. He has been named by a prominent shipping newspaper as the most influential shipping lawyer in the world and was named ‘Lawyer of the year’ in 2021 by Best Lawyers.
But he is perhaps best known as the global head of transport at the law firm Norton Rose Fulbright, where, for many years he led a large team focusing on ship finance for new buildings and second-hand vessels, advising hedge funds and private equity and the restructuring of several listed shipping companies.