Washington D.C., June 13, 2002—The International
Finance Corporation, the private sector development arm of the World Bank,
will support the expansion of Turkey’s tourism and business travel infrastructure
with a US$3.5 million loan to a leading Istanbul hotel. The loan will be
used to help finance the creation of a new conference/business center and
the refurbishment of existing rooms.
The investment in the Conrad Hotel, a high-end establishment overlooking
the Bosphorous Strait, will support a tourism complex that employs
some 400 full-time staff, provides significant foreign exchange earnings
for Turkey, and forms an important part of the country’s tourism infrastructure.
The tourism industry - a leading creator of jobs - is vital to Turkey’s
economy, with total revenues in 2001 of more than $8 billion.
“The Conrad Hotel has effectively served tourist and business travel market
since it opened its doors in 1992,” said Khosrow Zamani, IFC Director
for Southern Europe and Central Asia. “The evolution and expansion of
the Turkish hotel industry remains fundamental to the growth of tourism
and business travel. The creation of a new business/conference center will
create a new revenue stream for the Conrad Hotel and help protect against
occasional dips in conventional tourism. The investment reflects our continued
commitment to supporting Turkey’s private sector as it recovers from the
recent financial crisis. As the country embarks on a growth plan,
we will continue to grow our role in Turkey,” Mr. Zamani added.
The total $8.8 million project will improve the hotel’s competitive position
for attracting mid-sized conferences, create revenue streams from previously
unused property space, and provide higher margins and occupancy rates.
The loan to the Conrad Hotel - the first IFC tourism sector investment
during this period of recovery since April 2001 - marks IFC’s third investment
in the Conrad since its founding. Aksoy Group, a Turkish family-owned
enterprise with diverse business interests, is currently the leading shareholder
of the hotel (49 percent). The technical sponsor, holding a 25 percent
shareholding, is Conrad International Corporation, the overseas arm of
Hilton Hotels Corporation of California. The Turkish Social Insurance
Fund and State Employees Pension Fund are institutional investors each
holding a 15 percent and 11 percent shareholding respectively.
The IFC investment marks the Corporation’s tenth Turkey investment in
less than a year. Since April 2001, IFC has invested more than $350 million
in a wide range of companies and financial institutions to help weather
the current economic difficulties. The investments have been aimed at boosting
export revenues, improving efficiency, expanding production, and replenishing
IFC’s mission 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, and provides technical assistance
and advice to governments and businesses. Since its founding in 1956 through
the close of the last fiscal year on June 30, 2001, IFC committed more
than $31 billion of its own funds and arranged $20 billion in syndications
for 2,636 companies in 140 developing countries. IFC’s committed portfolio
at the end of FY01 was $14.3 billion.