PROJECT

Projects

Environmental & Social Review Summary

Project Number

45146

Company Name

PRECIOUS SHIPPING PUBLIC COMPANY LIMITED

Date ESRS Disclosed

Jun 29, 2021

Country

Thailand

Region

East Asia and the Pacific

Last Updated Date

Apr 7, 2023

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : Jun 14, 2021
Signed : Jun 29, 2021
Invested : Sep 7, 2021

Sector

Water Transportation

Industry

Infrastructure

Department

Regional Industry - INF Asia & Pac

Project Description

The proposed investment consists of a loan to five wholly owned subsidiaries of Precious Shipping Public Company Limited (“PSL” or the “Company”), based on securitization of the cashflows available to PSL under long term charter contracts with Ultratech Cement Limited (“Ultratech”) for five operating ships (four specialized cement carriers and one dry bulk vessel) (the “Project”).. The four specialized, custom built cement carriers of 21,000 Dead Weight Tonnage (“DWT”) each are used to transport cement along the west coast of India and Sri Lanka. The dry bulk carrier of 56,000 DWT is used to transport various dry bulk commodities on international routes as per demand (collectively the five vessels are referred to as “Project Vessels”). Each project vessel is owned and operated under a special purpose company (all five special purpose companies are collectively called Project Companies).

 

The company currently operates 32 dry bulk ships and four cement carriers with a total capacity of 1.6 million DWT. PSL was established in 1989 and was listed on the Thailand Stock Exchange in 1993. The company’s fleet is relatively young compared to the industry with an average age of 9 years.

 

The four cement carriers are Apinya Naree (APY), Boonya Naree (BNY), Chanya Naree (CNY) and Danaya Naree (DNY). The fifth vessel is Apiradee Naree (APD), which is the bulk carrier. Three vessels became operational in 2014, and one each in 2012 and 2015. The vessels are managed and crewed in-house by PSL and their subsidiary companies. Three of the cement carriers (APY, BNY and DNY) operate only on the Indian west coast and go to Sri Lanka once in five years for dry-docking. The cement carrier CNY operates on a regular basis the India - Sri Lanka route. The bulk carrier Apiradee Naree operates international routes as per demand.

 

The project companies or PSL do not own or operate any port facilities used by the vessels. The port and loading/unloading facilities are regularly used by vessels owned by different companies and were not built, upgraded or subject to any specific improvements to accommodate PSL’s vessels, and therefore are not considered associated facilities for the project.                                                   

Overview of IFC's Scope of Review

In light of the COVID-19 related travel restrictions, IFC relied upon an Environmental and Social (E&S) Due Diligence (ESDD) of the project by a third-party consultant, discussions with PSL’s corporate heads of functions and discussion with the consultant’s staff involved in the ESDD. The project is a loan to the project companies with use of proceeds defined. Accordingly, IFC’s appraisal focused on: (a) PSL’s corporate environment and social management system (ESMS) particularly its adoption and application in the project companies/project vessels; and (b) E&S performance of the project vessels. The ESDD included: review of the corporate and project documentation provided by PSL including plans, procedures, vessel level E&S documentation and evidence of implementation; secondary information about the project available online; an assessment of navigation routes and sensitive marine biodiversity areas; and consultations with biodiversity stakeholders.

 

The ESDD included interviews with PSL’s corporate heads of operations, projects, technical, human resources, security, quality systems, E&S, and procurement. The third-party consultant audited two of the five vessels i.e. one cement carrier and one bulk carrier, considering that all cement carriers share the same design and operating procedures. The site audits took place on 6th April 2021 at the Apiradee Naree (bulk carrier) vessel and on 7th April at the Boonya Naree cement carrier vessel. The site audits included meetings with PSL’s E&S team in the vessels, an inspection of the vessels, document and record review, interview of the crew, visit to the docks and pictorial evidence recording.                                                   

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Broad Community Support

Environmental & Social Action Plan