31166 - OSL Kochi

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Summary of Proposed Investment

Project Number

31166

Company Name

SPARKLE PORT SERVICES LIMITED

Date SPI Disclosed

Aug 23, 2011

Country

India

Industry

Infrastructure

Projected Board Date

Sep 22, 2011

Status

Completed

Sector

Port and Harbor Operations

Department

Regional Industry - INF Asia & Pac

Environmental Category

B - Limited

Previous Events

Approved : Sep 30, 2011
Signed : Oct 25, 2011
Invested : Feb 22, 2012

Project Description

Sparkle Port Services Limited (“SPSL”) is a 100% subsidiary of Ocean Sparkle Limited (“OSL”), an Indian provider of port management services. SPSL has been awarded a 17 (15+2)-year contract by Petronet LNG Limited (“Petronet”) to provide services at Petronet’s upcoming LNG terminal at Kochi in southern India. Petronet is currently operating an LNG plant at Dahej in western India. Ocean Sparkle has been providing port management services at the Dahej terminal since 2004 (via a group company, Sealion Sparkle).

As part of its contract with Petronet, SPSL will purchase and deploy 4 tugboats and 1 marine craft at Kochi, for a total cost of $31.5 million. IFC is considering providing an A loan of $11.5 million.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	11.34
Equity

Development Impact

Support greater usage of an environmentally-friendly fuel, in the face of growing energy demand and limited domestic supply: The share of natural gas in the primary energy segment in India is only 8% currently. Natural gas supplies from domestic sources are expected to be constrained over the next few years; as a result, India’s reliance on imported LNG is expected to increase. SPSL is a key link in the logistics chain for Petronet as it seeks to ramp up LNG imports through the new terminal at Kochi. By supporting Petronet’s growth, SPSL will indirectly be contributing to the greater usage of an environmentally friendly fuel, and increasing the share of fuel that is bought and sold under free market conditions (Petronet and other newer market players are operating under new legislation that requires open access and unbundling of the supply chain).

Higher Environmental, Social, Health and Safety Standards: IFC will work closely with SPSL to ensure that IFC performance standards are met, particularly those related to labor management and working conditions, as well as the management of effluents and waste-water.

Employment Generation: As a result of the Project, direct employment is expected to be created for ~56 employees.

IFC''s Role
-Provide long-term debt financing to support SPSL''s investments for the project

Additionality
-Fixed-rate INR funding for the lifetime of the loan- not available from alternative financiers
-Longer tenor than is available from alternative financiers (local lenders not willing to offer more than 8-9 years, despite long contract tenor)
-Unique repayment profile that is aligned with contract economics

This is a Category B project because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The Company has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with applicable environmental, health and safety and social requirements, including: international maritime standards under MARPOL, SOLAS, and IMO; Indian Merchant Shipping Rules and environmental, health and safety laws; and the IFC Social and Environmental Performance Standards. A discussion on the Company’s plans to mitigate/minimize identified environmental and social impacts has been provided in the Environmental and Social Review Summary (ESRS) and an Environmental and Social Action Plan (ESAP).

Contacts

For Inquiries About the Project, Contact

Ocean Sparkle LimitedPlot No. 128, 1st Floor
Srinagar Colony, Hyderabad, Andhra PradeshINDIA - 500 073

Telephone: 040 - 23741138 / 23743507 / 23754600
Fax: 040 – 23748752
E-mail: oslhyd@oceansparkle.com

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

Ocean Sparkle Limited
Kochi Branch Office, 24/448, 1st Floor
Indian Chamber Building,
G.V.Iyyer Road
Willingdon Island, Kochi – 3, India.

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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