Moscow, Russia, July 13, 2010—
IFC, a member of the World Bank Group, and the European Bank for Reconstruction
and Development today signed an agreement with entities representing
Turkish investors to raise over €45 million in debt to support the development
of five mid-market hotels in four regional cities of Russia.
The project is expected to improve the
availability and the standard of hotel services to travellers and contribute
to the improvement of the business infrastructure in Samara, Kaliningrad,
Yaroslavl, and Krasnoyarsk , with a total capacity of 750 rooms.
IFC and EBRD signed the agreement with
Russian Hotel Investments,
a company set up in Russia for the construction of the hotels, representing
the interests of a group of Turkish investors including Akfen REIT, part
of Akfen Holding, and Kasa Construction, one of the important contractors
in the Russian Federation, controlled by the principals of Turkey’s Kayi
and Insa groups.
“We are pleased to support an investment
from one emerging market to another”, said Dimitris Tsitsiragos, IFC Director
for Global Manufacturing and Services. “Developing a mid-market
hotel chain in Russia’s regional capitals will substantially expand availability
of business infrastructure and send a positive signal to other foreign
hotel investors who are considering investments in Russia.”
Cuneyt Baltaoglu, representing Russian
Hotel Investments said: “We are glad to have the support of IFC and EBRD,
and are eager to expand our business from the initial five properties into
a larger hotel portfolio in Russia within the coming seven years.”
IFC and EBRD have provided €22.6 million
in debt financing each for the project.
To improve operational efficiency of
the Russian Hotel Investments B.V., IFC will use its global hotel sector
expertise to help the company develop and adopt formal risk mitigation
measures, introduce sound environmental and social practices, and improve
corporate governance standards.
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing capital for private enterprise,
and providing advisory and risk mitigation services to businesses and governments.
Our new investments totalled $14.5 billion in fiscal 2009, helping channel
capital into developing countries during the financial crisis. For more
information, visit www.ifc.org.