The German CIRR (Commercial Interest Reference Rate) ship financing programme is a government-supported initiative aimed at promoting the construction of new ships through favorable financing terms. Under this program, shipowners can secure loans at fixed, low-interest rates, backed by the German government, to encourage the growth and competitiveness of the German maritime industry. The program is managed by KfW, the German development bank, and aims to support both domestic and international shipowners
Objective(s) and scope
The Commercial Interest Reference Rate (CIRR) ship financing scheme in Germany supports German shipyards in global competition and strengthens the country as a shipbuilding location.
Under the CIRR Ship Financing Programme, buyers of ships receive a fixed-rate loan based on the CIRR interest rate (CIRR stands for "Commercial Interest Reference Rate"), which applies for the entire tenor of the loan. This minimum interest rate is prescribed by the OECD for officially supported financings in order to ensure competitive neutrality. To qualify, buyers must order the ships and/or ship components from a German shipyard.
Those loans mostly cover sums due at the time of delivery.
Type of finance provider
Financing has to be arranged and granted by commercial banks. The latter are entitled to apply for refinancing at KfW.
Administering body
KfW IPEX-Bank (on behalf of KfW acting as mandatary for the Federal Republic of Germany)
Financing value
The cumulative amount of the Interest make-up guarantees granted in this connection were approximately at EUR 27,4 billion at the end of 2023.
Additional information
For the financing bank, the CIRR Ship Financing Programme offers the following incentives: First, the interest rate risk of the loan is borne by the Federal Republic for the entire term. Second, this programme enables the bank to access favourable refinancing from KfW without putting a strain on its own liquidity. This possibility to refinance with KfW is considered the usual case by the Federal Government and is exercised by most banks. Interested banks can inquire about the terms and conditions applicable to refinancing solely by contacting the Ship CIRR Desk.
The experts staffing KfW IPEX-Bank’s Ship CIRR Desk advise shipyards, financing banks and shipping companies already in the pre-financing stage. They review the applications and conclude interest make-up and/or refinancing agreements.
