New York, NY, May 10, 2001—The International
Finance Corporation, the private sector arm of the World Bank Group, today
announced its first investment in Armenia. The initiative will support
the Government of Armenia’s efforts to further develop a sound private
sector and help attract foreign direct investment.
IFC has made an equity investment of US$3.6 million in the $39 million
renovation of the historically and culturally significant Hotel Armenia
located in the center of Yerevan. The Overseas Private Investment
Corporation (OPIC) is providing an $18 million loan, and the hotel operator,
Marriott International, will provide $3 million of subordinated debt.
The sponsors—who are active members of the US-based Armenian business
community and strong supporters of Armenia—have provided over $10 million
in equity to the project. They are a group of ten investors who own
the hotel through a holding company, AK Development LLC. The sponsors
have various business interests and expertise, including real estate and
ownership of several Marriott Hotels around the world.
Mr. Edward Nassim, IFC’s Director for Central and Eastern Europe, said
that the project will have a significant demonstration effect and promote
investor confidence in the wake of the country’s transition to a market
economy in the early 1990’s. Armenia’s significant resources of
human capital, natural beauty, cultural traditions, and strong Diaspora
should have the potential to attract more foreign investment, he added.
IFC’s investment will support the hotel’s reconstruction and refurbishment
and introduce well-developed managerial techniques in marketing, engineering,
hospitality, finance, and accounting. The hotel will train and employ
about 300 people. At completion, Hotel Armenia under the Marriott
brand, will have 223 modernized rooms and will make available the first
modern accommodation to business travelers and tourists to the country.
The President of Armenia, Mr. Robert Kocharian; the President of the World
Bank, Mr. James D. Wolfensohn; acting OPIC President, Kirk Robertson; Senior
Vice President of Marriott International, Mr. Warren Chan; and Staples
Executive, Mr. Paul Korian representing the sponsor group, participated
in the signing ceremony that took place today in New York on the first
day of the Armenia Investor Conference. The conference is sponsored
by IFC, the World Bank, and the U.S. Trade and Development Agency.
The mission of IFC (www.ifc.org)
, part of the World Bank Group, is to promote sustainable private sector
investment in developing countries as a way to reduce poverty and improve
people's lives. IFC finances private sector investments in emerging markets,
mobilizes capital in the international financial markets, and provides
technical assistance and advice to governments and businesses.