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EBRD finances ships to cruise Danube, Volga rivers
Region’s tourism industry boosted by US$ 15 million Viking River Cruises loan
The European Bank for Reconstruction and Development is lending Viking River Cruises SA US$ 15 million (€16.9 million) to acquire three cruise ships to ply the Danube and Volga rivers. One of the ships, the MV Viking Neptune, was christened today in Mainz, Germany, by its "godmother", EBRD Deputy Vice President Noreen Doyle.
The ships should provide a boost to the tourism industry in Hungary and Russia, introducing a four-star standard of service expected to attract foreign and local tourists alike. They will create jobs – for crew, maintenance staff and local catering companies – and stimulate competition in the river-cruise industry. "These ships should draw tourists to some of Europe’s most gorgeous river scenery and captivating port cities," Ms Doyle said. "That can only be good news for the Russian and Hungarian economies."
About US$ 9 million of the loan will go to Viking’s Hungarian subsidiary to finance the 114-metre, 150-passenger Viking Neptune, which will cruise the Danube from Amsterdam to Budapest – and eventually farther east, when the river is reopened to commercial traffic. The ship was built at the Merwede shipyard in the Netherlands. Its crew will be supplied and managed by Mahart, a Hungarian state-owned river shipping company.
The rest of the loan, to Viking’s Russian subsidiary, will be used to acquire and refurbish the 125-metre, 189-passenger MV Mikhail Lomonosov (which it has previously chartered) and another similar ship next year. Those ships will sail primarily between Moscow and St Petersburg on the Volga.
The ships will expand Viking’s fleet to 28 vessels. Viking, following its acquisition of a major German cruise operator, Köln-Dusseldorfer Deutsche Rheinschiffahrt AG last year, is now the largest river cruise operator in Europe and among the five largest in the world. The company, whose majority shareholders are Scandinavian, is incorporated in Luxembourg.
The EBRD’s involvement in this project is important because of the relative scarcity of long-term debt financing from commercial banks for river-cruise activities. As the first EBRD shipping loan secured on Russian mortgages, the Viking loan should also serve to boost the confidence of potential foreign investors – and lenders – in such transactions.
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