September 2021
CIC has not carried out any audit mission for nor commissioned any consultancy services with Paul Y. Construction Company, Limited and there is no established relationship (financial or others) between CIC and Paul Y. Construction Company, Limited .
The opinion provided herein is an independent opinion on the sustainability credentials and management of the financial instrument, based on the information made available to CIC. CIC has neither interviewed any of the Paul Y. Construction Company, Limited ’s employees, nor performed any on-site assessment and tests to check the accuracy of the information provided by Paul Y. Construction Company, Limited . The accuracy, comprehensiveness and trustworthiness of the information collected rests with Paul Y. Construction Company, Limited . CIC, in providing this opinion, has not certified the effectiveness, the quality or the irreversibility of the assets to be financed by the sustainable financing instrument. Paul Y. Construction Company, Limited is fully responsible for attesting the compliance with its commitments defined in its policies, for their implementation and monitoring. The opinion delivered by CIC neither focuses on the financial performance of Paul Y. Construction Company, Limited , nor on the effective allocation of its proceeds. CIC is not liable for the consequences arising if third parties use this opinion either to make investment decisions or to make any kind of business transaction.
The opinion provided by CIC on Paul Y. Construction Company, Limited can only be used by Paul Y. Construction Company, Limited and the Financial Institution. The distribution and publication are at the discretion of Paul Y. Construction Company, Limited , subject to CIC’s approval.
| Application no. | SFCS-APPLY-2021-013 |
|---|---|
| Certificate no. | SFCS-2021-014 |
| Date of application | 2021.12.08 |
| Company name | Paul Y. Construction Company, Limited |
| Business registration no. | 01011131 |
| Company profile | Headquartered in Hong Kong, Paul Y. Engineering Group Limited is dedicated to providing full-fledged engineering and property services, with operations in Hong Kong, Mainland China, Macau, Singapore and Malaysia. For 75 years, Paul Y. Engineering has been at the heart of some of the most challenging and impactful construction projects that have shaped the iconic skylines of Hong Kong and many other cities. Our projects include commercial and residential buildings, institutional facilities, highways, airport runways, railways, tunnels, port works, water and sewage treatment facilities etc. We serve our valuable clientele by delivering integrated solutions, from concept to completion and ongoing management, as well as components that best match clients' needs and expectations. Meanwhile, we are deeply committed to our role as a responsible corporate citizen contributing to building harmonious and sustainable communities. |
| Sustainable financing instrument | Green Loan |
| Application level | Project Level |
Paul Y. Construction Company, Limited has confirmed the proceeds will be used for the specified Project Categories that meet the eligibility criteria stated:
| Project Categories | Green Building |
| Eligibility Criteria | BEAM Plus target rating -Gold |
Paul Y. Construction Company, Limited has confirmed that the selected Project Categories and Eligibility Criteria are in line with the following internationally recognized frameworks across financial markets:
Frameworks
Paul Y. Construction Company, Limited has also confirmed the following purposes of the proceeds:
Purpose of financing
Paul Y. Construction Company, Limited has identified the below project(s) as eligible green projects which meet the eligible criteria:
| Project name | Design-Build-Operate Contract for the Additional District Cooling System (DCS) at the Kai Tak Development (KTD) |
| Location | Kai Tak Development Area |
| Project description | The additional DCS plant will be located at Site 1P1 at the northern portion of the Kai Tak Development (KTD), which is adjacent to the DSD Desilting Compound No. 1. Designated areas are allocated for the components of the District Cooling System (DCS) which comprises (1) additional DCS plant with chiller plant room, seawater pump house, seawater intake chamber, seawater supply, and discharge pipelines; (2) seawater outfalls; (3) DCS distribution piping network; and (4) heat exchangers and remote monitoring, control and metering facilities at consumer DCS substations, etc |
| Highlights of green elements and estimated environmental impact | • Recycle at least 30% of construction waste • With the aid of free cooling, VAV, high COP chiller and PV panels, the energy consumed by the education centre can eventually leads to zero carbon. • Achieve an annual reduction of 40% in water consumption compared to the baseline case • Saving 25% of the irrigation water consumption from rainwater re-use and efficient water irrigation system will be included • Reduction of 20% of annual sewage water discharge can be achieved • Using CIC carbon assessment tools • Using Green Label NRMM for generator |
The applicant proposes to raise Green Loan for Additional District Cooling System (DCS) at the Kai Tak Development (KTD) project that falls into the Green Loan Principle’s project categories, which is green building.
The applicant has clearly stated the highlights of green elements and estimated environmental impact. BEAM Plus Implementation Plan KTDCS is provided to demonstrate their determination to achieve BEAM Plus New Building v2 Gold rating.
Based on the above information, we concluded that the Additional District Cooling System (DCS) at the Kai Tak Development (KTD) project will bring significant environmental benefits.
To ensure that the projects financed by the sustainable financing instrument meet the eligible criteria, Paul Y. Construction Company, Limited has established an evaluation and selection process with the following key elements:
Evaluation and selection
The applicant states that the selection of eligible projects is based on the Director’s review, scale, relevance in sustainability, suggestions of other departments such as the project team, finance team, and/or environmental department.
The applicant provides the sustainability policy of Paul Y. Engineering Group Limited, which is the parent company of the applicant. The document shows that Paul Y. Engineering has committed that make sustainability core to their business values and operations.
However, no description or evidence is showing that the applicant would fully follow the policy of Paul Y. Engineering Group Limited.
Paul Y. Construction Company, Limited has provided information regarding the internal governance process through which the company can track allocation of funds towards green projects. Paul Y. Construction Company, Limited will establish a register of funds to contain the following information:
Information
Pending the full allocation of the proceeds, Paul Y. Construction Company, Limited intends to hold and/or invest the balance of proceeds not yet allocated in accordance with n/a
The applicant has promised in “Paul.Y Engineering Group Limited and its subsidiaries Green Finance and Policies and Procedures” that the applicant will designate specific project bank accounts for each eligible project. And all the key information including green loans drawdown and its use will be kept under these specific project bank accounts.
Applicant has confirmed the use of the fund registry template for the Management of Proceeds.
Paul Y. Construction Company, Limited is committed to transparent reporting and will publish Impact Report/ Financial Report/ ESG Report within one year from the date of issuance of each sustainable financing instrument and annually thereafter until the full allocation of the proceeds. The report will consist of information on the allocation of the proceeds and the environmental impacts of the projects.
Allocation Report
In terms of impact reporting, Paul Y. Construction Company, Limited will report on relevant environmental metrics of the projects to which the proceeds have been allocated in line with the technical requirements.
| Project Categories | Green Building |
| Metrics | Total carbon emissions (permanent works) Total carbon emissions (temporary works and site impacts) |
| Methodologies | CIC Carbon Assessment Tool (CAT) |
| Project Categories | Green Building |
| Metrics | Percentage of energy use reduced/avoided compared with local baseline or building code |
| Methodologies | The methodology of the energy use reduced/avoided will make reference to the latest Building Energy Code (BEC) or Appendix G of ASHRAE 90.1-2007 or equivalent. |
| Project Categories | Green Building |
| Metrics | Percentage of water reduced/avoided compared with local baseline |
| Methodologies | Calculation is based on reduction of water consumption when comparing with a similarly occupied space whose water fittings and appliances conform to a baseline performance. The calculation takes into account the number of occupants, male to female ratio, and the number of operational days per annumas required in BEAM Plus CIC SFCS –Assessment Report 10Version 3.0standard. |
| Project Categories | Green Building |
| Metrics | Waste minimised, reused, recycled in percentage of total waste and/or in tonnes p.a |
| Methodologies | Environment, Transport and Works Bureau. Technical Circular (Works) No. 19/2005. Environmental Management on Construction Sites. (ETWB TWC 19/2005) should be used as a guide to the nature of reporting and recording keeping for calculation of % recycling and reuse |
| Project Categories | Green Building |
| Metrics | Calculate/record the green roof area (square meter) |
| Methodologies | As-fit drawing and site photo to demonstrate the green roof area. |
The applicant has committed to disclosure the impact report annually or upon request by the lending bank.
The applicant has committed to publishing the impact report as part of the financial report and ESG report.
The applicant has clearly defined the key performance indicators applicable for impact reporting.
| Use of proceeds | Compliant |
|---|---|
| Project evaluation and selection | Compliant |
| Management of proceeds | Compliant |
| Reporting | Compliant |
Based on the above assessment, we recommend to approve the application (Application no.: SFCS-APPLY-2021-013, Certificate no.: SFCS-2021-014) of the CIC Sustainable Finance Certification Scheme with validity from 30-09-2021 to 29-09-2023 .