Offshore wind vessels prioritized for Title XI financing

Written by Nick Blenkey
White House has prioritized offshore wind vessels for Title XU financing

As one part of an initiative announced by the White House yesterday, vessels built for the offshore wind sector have been designated “Vessels of National Interest.”

The designation, aimed at prioritizing offshore wind vessels for the Title XI federal ship financing, was made as the Biden administration joined with eleven East Coast governors to launch a new Federal-State Offshore Wind Implementation Partnership to accelerate the growing offshore wind industry.

According a White House fact sheet, “the partnership will support efforts to provide Americans with cleaner and cheaper energy, create good-paying jobs, and make historic investments in new American energy supply chains, manufacturing, shipbuilding, and servicing.”

The federal ship financing program (generally referred to as “Title XI” based on the part of the Merchant Marine Act of 1936 that established it) is administered by MARAD.

As explained by MARAD, the program “provides for a full faith and credit guarantee by the United States Government to promote the growth and modernization of the U.S. merchant marine and U.S. shipyards. Through long-term debt repayment guarantees, the program encourages U.S. shipowners to obtain new vessels from U. S. shipyards cost effectively. It also assists U.S. shipyards with modernizing their facilities for building and repairing vessels. The repayment term allowed under the program generally is much longer, and the interest rates are lower, than those available from the commercial lending market because of the obligations guaranteed by the U.S. Government.”

VESSELS OF NATIONAL INTEREST

MARAD is authorized by 46 USC 53703(d) to prioritize processing the applications for certain vessels that have been determined to be of importance for the support of U.S. shipyards and the U.S. Merchant Marine. As of June 21, 2022, and after consultation with the Bureau of Ocean Energy Management, MARAD has designated the following as Vessels of National Interest:

Vessels that are constructed or reconstructed to be used for use primarily in:

  • construction,
  • service,
  • and/or maintenance of offshore wind facilities.

Applications for Vessels of National Interest have priority for review and funding over applications for all other vessels except those considered suitable for service as a naval auxiliary vessel.

Categories: News, Offshore Wind, Shipbuilding Tags: , ,