The forward half of the Alaska Class Ferry Tazlina moved out of the assembly hall at the Vigor Alaska shipyard in Ketchikan. Vigor Alaska built the two Alaska Class Ferries under a $120 million state contract. (Photo by Leila Kheiry/KRBD)

Alaska’s investment fund is creating a $10 million loan program designed to make Ketchikan’s shipyard more competitive.

On Wednesday, the board of directors of Alaska Industrial Development and Export Authority unanimously approved AK SHIP, as the financing plan will be called.

AIDEA Chief Investment Officer Alan Weitzner said in a recent interview that the state is encouraging vessel owners to “consider Alaska’s shipyards and in this case, specifically the Ketchikan shipyard.”

The state-owned shipyard is operated by Vigor Alaska, which recently delivered two Alaska Class Ferries. It also holds contracts for maintaining and overhauling state ferries.

But there’s uncertainty over the future of the Alaska Marine Highway System which is bracing for at least a $40 million cut in state funding.

Vigor Industries spokeswoman Jill Mackie says bridge financing could help keep the more than 100 shipyard workers employed by bringing in future contracts.

“We believe it will incent more vessel owner/operators who operate in Alaska,” she said, “but who are currently repairing or maintaining their vessels in the Puget Sound, to have some or more of their work done in Alaska.”

AIDEA’s board will be charged with signing off on AK SHIP loan applications. The program allows vessel owners to apply for up to $1.5 million in market-rate financing that would be paid back within two years.