SP – SSA International Terminal

Cai Mep & Cai Lan_SSIT logo_rev


Country Republic of Vietnam
Sector Transport
Signing Date 5 October 2009
Total Project Cost US$ 240M
ICF Debt Pool Exposure US$ 10M
IFI Exposure US$ 30M

Project Description

SSIT (SP-SSA INTERNATIONAL TERMINAL) is a joint venture between SSA Holdings International – Vietnam (owned by Carrix Inc.), Saigon Port, and Vietnam National Shipping Lines Corp. It is a green field container terminal project being developed on the Cai Mep River in Ba Ria-Vung Tau province to serve containerized cargo in the South of Vietnam and the Southeast Asia region.. Container volumes in the HCMC area have increased significantly in recent years, causing congestion at the region’s undersized ports currently within HCMC (Ho Chi Minh City).

The terminal will be well positioned to capitalize on the region’s growth in container volumes and will help relieve existing congestion by providing much needed container handling capacity. A deeper draft and the latest container handling equipment will enable SSIT to serve today’s large containerships which cannot call at existing HCMC ports due to draft and turning restrictions. Design and construction of the project will be done in accordance with best current practice as well as IFC standards.

Financing Structure

The total loan amount is US$ 155M of which US$ 10M is from the ICF Debt Pool.

Infrastructure Component

The US$ 10M senior loan to Cai Mep will be used to finance land stabilization, dredging, constructing the quay and trestles, as well as developing the container yard and supporting infrastructure.

Investment Rationale

 

  • Strong Project: due to existing and foreseeable congestion in the port and HCMC area, which the project will help to alleviate.
  • Experienced Shareholder/Sponsor: The sponsors have extensive experience with similar operations and will ensure high productivity, and low cost operations. Carrix is a strong sponsor with a proven management team as well as extensive experience in international operations and green-field developments.
  • Solid Project Fundamentals: Favorable location with deep draft and convenient access to global shipping lanes by sea and to HCMC by road and barge. The port facility is considered strategically located as it is near to the sea buoy.

 

Development Impact

The project is part of the Vietnam Port Master Plan to improve port infrastructure in HCMC and to reduce the inefficiencies (low draft) and congestion resulting from the current city center port terminals. The port’s main development impact will be the improvement of transportation infrastructure, increasing efficiency, competition and reduction of all-in transport costs which will benefit Vietnam as a whole.

It is anticipated that the project will contribute significantly to the economic development of the country, provide employment and tax revenue directly.

Additionality

Funds: The availability of long-term financing to finance infrastructure projects is limited or not available in Vietnam. Thus in the absence of a bank market, the ICF Debt Pool funds are additional.
Design and Efficiency: SSIT will meet international best practices with respect to environmental standards, as well as comply with IFC environmental standards. The project will also introduce efficiencies within the port sector locally and regionally.