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IFC TO INVEST IN EGYPT'S TOURISM SECTOR


L. Joseph


WASHINGTON, D.C., Oct. 13 -- The International Finance Corporation (IFC) has approved financing for two Egyptian companies that will develop a hotel resort on the peninsula of Ras Abu Soma, 40 km south of Hurghada on the Red Sea. IFC will invest up to US$2.4 million in the equity of Club Ras Soma Hotel Company (CRSHC), which will build and operate a 314-room five-star holiday village at an estimated cost of US$30 million, to be managed by Robinson Club GmbH of Germany. IFC will also provide a syndicated loan of DM15 million to CRSHC, of which DM8.5 million (US$5.2 million equivalent) will be for IFC's account. IFC will make an additional equity investment of up to US$1 million in Abu Soma Development Company (ASD), which is developing the site of Ras Abu Soma, including infrastructure and utilities. The main sponsors of CRSHC are the Egyptian Finance Company (EFC), a private sector venture capital company, in association with the Egyptian Tourism Investment Company, a specialized investment fund established a
nd managed by EFC in 1992, and ASD. Mr. AndrČ Hovaguimian, Director of IFC's Central Asia, Middle East, and North Africa Department, said that "as the first large-scale integrated tourism development project in the country, Ras Abu Soma is expected to contribute significantly to the expansion of Egypt's tourism sector and be a model for other projects, especially in terms of sound environmental management. It is also likely to stimulate development, create jobs, and generate foreign exchange earnings." With this investment, IFC is complementing a World Bank project to promote private tourism infrastructure without environmental damage. IFC is the private sector arm of the World Bank Group and the largest multilateral source of financing for private sector projects in developing countries.