How The OECD Agreement Rate System Really (Would Have) Worked

by Andreas Uibeleisen, KfW

KfW is the abbreviation for Kreditanstalt für Wiederaufbau, or Bank for Reconstruction. KfW’s activities today comprise a wide range of specialized banking services in the fields of domestic lending, export financing and channeling German government assistance to developing countries. With a balance sheet of US$167 billion, it ranks within the 10 largest banks in Germany.

Within its function and activities KfW acts as both a public and private lender. However, unlike commercial banks, KfW’s activities must always have a link to the German economy. For ship financing, it can either finance vessels built or converted by German yards for a foreign buyer, or finance a German shipping company ordering new vessels from a German or foreign shipyard.

Ship financing in Germany is highly developed and is offered by commercial banks, specialized ship mortgage banks, so-called Landesbanken, and KfW. In recent years, KfW’s new loan commitments in shipping were roughly US$1.5 billion per year. Per the end of last year, its loan portfolio reached approximately US$9.2 billion, making it the largest ship financing institution in Germany.

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