Washington, DC, August 29 2005.—The
International Finance Corporation, the private sector arm of the World
Bank Group, will provide a senior loan of up to $29.5 million to Sofia
Kyiv Hotel. The financing, which includes a B-loan of up to $13 million,
will be used to complete the construction of a high-quality hotel in Kyiv’s
city center. The project’s investor is Industrial Union of Donbass,
a large Ukrainian industrial group whose main activity is the production
and trading of steel. The hotel will be operated by Hyatt International
under the Hyatt Regency brand name.
The project will have a positive effect on the Ukrainian tourism sector
by transferring Hyatt’s first-class hotel management methods and environmental
best practice standards. As there is a strong demand for well-managed
business hotels in Kyiv, customers will benefit from the hotel’s promotion
of high quality standards.
Edward Nassim, IFC’s Director for Central and Eastern Europe, noted, “IFC
is committed to providing long-term funding to domestic investors in Ukraine.
This loan will help the investors expand their business and better pursue
Dimitris Tsitsiragos, IFC’s Director for Global Manufacturing and Services,
commented, “Our investment will play an important role in addressing a
real market need for business hotels with high quality standards in Kiev,
a need that is currently underserved. Through this project we also
aim to develop and improve the service delivery of Ukraine’s hotel sector.”
Sofia Kyiv’s Chief Executive, Vitaly Misakov, said, “This hotel will
be very attractive for tourists and businesspeople alike, with its prime
location in the historic city center, adjacent to St. Sophia Cathedral.
It will give further momentum to the city’s economic development.”
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing and transition
economies, helping to reduce poverty and improve people's lives. IFC finances
private sector investments in the emerging markets, 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 FY04, IFC has committed
more than $44 billion of its own funds and arranged $23 billion in syndications
for 3,143 companies in 140 countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.
Ukraine became a shareholder and a member of IFC in 1993. Through the end
of fiscal year 2005 (June 30, 2005), IFC has invested $335 million in 18
projects in the country. IFC expanded its investment program in Ukraine
significantly in 2004-2005, committing $255 million in the agribusiness,
financial, and general manufacturing sectors. IFC has also been conducting
an extensive advisory program since 1992, which initially focused on the
privatization of small businesses, land, and idle construction sites. Current
donor-funded programs offer advice on corporate governance, leasing, and
agribusiness. Programs also seek to improve the business environment and
promote the growth of small and medium enterprises.