Bangkok, Thailand, June 30, 2021—To support continued transportation of cement along the west coast of India and Sri Lanka, and other critical dry commodities globally, IFC has provided a sustainability-linked financing package of $85 million to Precious Shipping Public Company Limited (PSL), a Thai shipping company.
IFC's investment will help finance four specialized cement carriers and one bulk carrier owned and operated by wholly owned subsidiaries of PSL—a member of the GP Group, a 153-year-old diversified Thai conglomerate with business interests in shipping, pharmaceuticals, aviation, technology and others.
The long-term financing is expected to improve the resilience of a key player in the shipping sector, headquartered in Thailand and one of the largest dry cargo ship owning companies operating in the geared sector of the tramp freight market. Further, the sustainability-linked loan has targets linked to the Sustainable Development Goals related to reducing onshore-sourced freshwater usage and consumption on board the company's vessels.
"IFC's support in structuring PSL's first sustainability-linked financing enhances our efforts to integrate sustainability into our mainstream operations," said Khalid Hashim, Managing Director for PSL. "With this financing, PSL has completed the process of augmenting its balance sheet and is now on a very strong footing to capture opportunities that the robust, dry cargo market may present."
The investment comes at a time when the maritime sector continues to be impacted by logistical challenges due to the lingering effects of COVID-19, with the impacts especially felt in the region. According to some estimates, shipping costs have skyrocketed as much as 300 percent and companies have had to endure long waits since the pandemic started.
"Strengthening maritime logistics and freight, in particular the coastal shipping infrastructure, is critical for both India and Thailand to improve their competitiveness and participate fully in global and regional trade. As India focuses on an infrastructure-led recovery from the impacts of the pandemic, it is important that supply chains maintain an undisrupted flow of goods," said Vikram Kumar, IFC New Business Manager for Infrastructure and Natural Resources in Asia Pacific. "Our investment will encourage cost-efficient and environmentally friendly modes of freight transportation to support a green and resilient revival in the region."
The $85 million financing package includes an IFC A loan of $55 million, a parallel loan of $15million from Export-Import Bank of Thailand, and an IFC B loan of $15 million from TMB Thanachart Bank Public Company Limited.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
About Export-Import Bank of Thailand
Export-Import Bank of Thailand (EXIM Thailand) is a state-owned specialized financial institution under the Ministry of Finance's supervision. EXIM Thailand officially started its operations in 1994 with the purpose to promote and support Thai exporters and investors using EXIM Thailand financial instruments and credit/investment insurance. EXIM Thailand has been actively advocating Maritime Financing for over two decades with the aim to drive International trades and to enforce Thailand's sustainable growth. For more information, please visit www.exim.go.th
About TMBThanachart Bank Public Company Limited
TMBThanachart Bank Public Company Limited (ttb) is the merger of TMB Bank Pcl. and Thanachart Bank Pcl., located in Thailand. It has integrated the strengths and potential of both banks, and follows its company philosophy "Make REAL Change" to create a new way of banking. The Bank not only offers superior financial products and services to customers, but also commits to providing financial literacy and financial solutions that are personalized and fitted to the needs of each customer segment throughout their life stages. The Bank's mission is to improve Thai's life-long financial well-being today and in the future. For more information, please visit www.ttbbank.com
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