April 2023
CIC has not carried out any audit mission for nor commissioned any consultancy services with YAU LEE CONSTRUCTION COMPANY LIMITED and there is no established relationship (financial or others) between CIC and YAU LEE 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 YAU LEE CONSTRUCTION COMPANY LIMITED’s employees, nor performed any on-site assessment and tests to check the accuracy of the information provided by YAU LEE CONSTRUCTION COMPANY LIMITED. The accuracy, comprehensiveness and trustworthiness of the information collected rests with YAU LEE 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. YAU LEE 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 YAU LEE 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 YAU LEE CONSTRUCTION COMPANY LIMITED can only be used by YAU LEE CONSTRUCTION COMPANY LIMITED and the Financial Institution. The distribution and publication are at the discretion of YAU LEE CONSTRUCTION COMPANY LIMITED, subject to CIC’s approval.
| Application no. | SFCS-APPLY-2023-001 |
|---|---|
| Certificate no. | SFCS-2023-001 |
| Date of application | 2023.03.22 |
| Company name | YAU LEE CONSTRUCTION COMPANY LIMITED |
| Business registration no. | 08311972 |
| Company profile | Yau Lee Construction Company Limited (YLC) was established in 1958. YLC specialises in construction, maintenance, renovation and design and building projects with advanced technologies/approaches including BIM and Modular Integrated Construction (MiC)/ Design for Manufacture and Assembly (DfMA) technologies. Based on its solid experience, multi-talented professionals, effective management system, advanced information system and highly efficient building technology, YLC has become one of the most innovative construction companies in Hong Kong and successfully achieved various breakthroughs in the past years. For instance, completion of Hong Kong Housing Authority’s (HKHA) first Integrated Procurement Approach (IPA) contract with 3D BIM in 2009, completion of HKHA’s second and the largest IPA contract with 5D BIM in 2018, construction of Hong Kong’s Construction 2.0 Pilot Project to firstly adopt MiC in an Architectural Services Department (ArchSD) project, construction of a long-span pedestrian suspension bridge to firstly adopt Lowering Construction Method for bridge installation in Hong Kong. Carry the same corporate culture, belief, and practice, YLC always strives for excellence to improve construction productivity and buildability as well as sustainability. YLC thinks green, practices green, acts green and aims to provide a smart and green living to the society and the world. |
| Sustainable financing instrument | Green Loan |
| Application level | Project Level |
YAU LEE CONSTRUCTION COMPANY LIMITED has confirmed the proceeds will be used for the specified Project Categories that meet the eligibility criteria stated:
| Project Categories | Circular Economy |
| Eligibility Criteria | Design and production of components, products and assets that support the circular economy |
YAU LEE 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
YAU LEE CONSTRUCTION COMPANY LIMITED has also confirmed the following purposes of the proceeds:
Purpose of financing
YAU LEE CONSTRUCTION COMPANY LIMITED has identified the below project(s) as eligible green projects which meet the eligible criteria:
| Project name | Main Contract (Design and Build) for Transitional Social Housing Project, Government Land STT No. HE0023, Sheung On Street, Chai Wan, Hong Kong |
| Location | Sheung On Street, Chai Wan |
| Project description | This is a Transitional Social Housing Project in Sheung On Street. The work includes design and build for a four storeys modular housing, providing 103 residential flats with independent bathroom and kitchen area, together with 16 nos. of MiC unit for Staircase / Security Room / Management office and Electrical Rooms. Site area in 614m2, and Gross Floor Area (GFA) in 2437m2. |
| Highlights of green elements and estimated environmental impact | All these MiC modules and other prefabricated elements including corridor slab, roof and the structural steel frame are designed as demountable and reusable, can be reassembly at other place. insulated modular wall with thermal and sound insulation properties are adopted for internal / external wall. Most of the construction and installation works inside the MiC modules including fitting out works and E&M installation were fabricated at the Off-Site Factory in Mainland China. On-site works in construction site and material wastage can be minimized as the quality control can be effectively controlled at the Off-Site Factory. |
The company proposes to raise Green Loan for Transitional Social Housing Project that falls into circular economy adapted products, production technologies and processes category under the Green Loan Principle. It is a design and build project of transitional housing demonstrating circularity with Modular Integrated Construction” (MiC) method.
The company has stated the features of the modular design with “3S concept” of Standardization, Simplification and Single Integrated Element and demountable for their steel MiC modules. All MiC modules and other prefabricated elements including corridor slab, roof and the structural steel frame are designed as demountable and reusable, and can be reassembly at the other place. It is also expected that over 90% of the construction and installation works inside the MiC modules including fitting out works and E&M installation were fabricated at the off-site factory in Mainland China, which can lead to material wastage minimization as the quality control can be effectively controlled at the off-Site Factory.
Based on the above information, conclude that the project would bring significant environmental benefits.
To ensure that the projects financed by the sustainable financing instrument meet the eligible criteria, YAU LEE CONSTRUCTION COMPANY LIMITED has established an evaluation and selection process with the following key elements:
Evaluation and selection
With the submitted Environment Organization Chart and Responsibilities (Environmental Protection), the company has set up an organization and workflow involving top management, project director and manager, and site manager, from different departments to review and select eligible green projects
YAU LEE CONSTRUCTION COMPANY LIMITED has provided information regarding the internal governance process through which the company can track allocation of funds towards green projects. YAU LEE CONSTRUCTION COMPANY LIMITED will establish a register of funds to contain the following information:
Information
Pending the full allocation of the proceeds, YAU LEE CONSTRUCTION COMPANY LIMITED intends to hold and/or invest the balance of proceeds not yet allocated in accordance with Internal Governance Process
The company has confirmed that all loan proceeds, project receipts and payments will be made through a designated account and its Account System for the eligible green project. As specified in the submitted Internal Governance Process, the company will monitor and control for the internal governance on proceeds management. Based on the relevant Project Code and the Account System, the company can monitor and trace back the money flow of the project throughout the project period.
YAU LEE CONSTRUCTION COMPANY LIMITED is committed to transparent reporting and will publish project progress 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, YAU LEE 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 | Circular economy |
| Metrics | Waste recycling rate (%) |
| Methodologies | KPI |
The company has committed to perform allocation and impact reporting at project level annually as project progress report.
The company has also clearly defined the key performance indicator (waste recycling rate %) applicable for the impact reporting with the underlying methodology.
| 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-2023-001, Certificate no.: SFCS-2023-001) of the CIC Sustainable Finance Certification Scheme with validity from 20-04-2023 to 19-04-2025 .