WASHINGTON, D.C., June, 23, 2004 – The
International Finance Corporation, the private sector arm of the World
Bank Group, today announced a $7 million investment agreement with the
Aga Khan Fund for Economic Development (AKFED) to help finance the restoration
and expansion of the Kabul Hotel, Afghanistan.
IFC’s investment fits with its strategy of investing in key hotel projects
in frontier countries, which can play a vital role in the development of
business infrastructure, and, over the longer term, tourism as well. The
Kabul Hotel has been in a major state of disrepair, owing to Afghanistan’s
recent legacy of successive wars, and dislocation from the international
The renovation and expansion (into a five-star deluxe 180 rooms facility)
of the Kabul Hotel, costed at $28 million, will give Afghanistan its first
international standard hotel. It will be run by AKFED’s hotel subsidiary,
Serena Tourism Promotion Services, as the Kabul Serena Hotel. The first
phase of expansion is expected to be completed by end-2004.
Prince Amyn Aga Khan, Chairman of AKFED's Executive Committee, and who
is intimately involved with the creation and operations of the Serena Group
of hotels, said, "Serena has a long-standing and close relationship
with IFC in its hotels throughout East Africa. I am delighted to see this
co-operation now being extended to the Kabul Serena hotel, which is destined,
I hope, to play a major role in the economic and social life of Afghanistan."
Sami Haddad, IFC Director for the Middle East and North Africa, added,
“IFC is committed to supporting the reconstruction strategy of the government
of Afghanistan, which includes enabling private sector development.” He
noted, “IFC expects that this investment will provide a powerful demonstrative
effect to the international investor community, and help spur much-needed
wealth and job-creating private capital inflows into Afghanistan.”
AKFED, based in Geneva, Switzerland, is the economic development arm of
the Aga Khan Development Network (AKDN), a group of development agencies
working in health, education, culture and rural and economic development;
AKDN has been active in Afghanistan since 1996. AKFED helps develop economically-viable
companies by simultaneously making equity investments and transferring
management and technical skills into those enterprises.
It operates as a network of affiliates, with more than 90 separate project
companies employing over 15,000 people and controlling assets of more than
$1 billion. IFC has made investments with AKFED in over 20 private sector
projects in Africa, Central Asia, Middle East and North Africa, and South
Asia – most recently in the First MicroFinance Bank of Afghanistan in
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people’s lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY03, IFC has committed more than $37
billion of its own funds and arranged $22 billion in syndications for 2,990
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY03 was $16.8 billion for its own account and $6.6 billion held
for participants in loan syndications.