WASHINGTON, D.C., March 27—The International Finance Corporation (IFC) has approved US$25 million in financing to an Egyptian company, Orascom Projects and Touristic Development (OPTD), for the expansion of the El Gouna tourism development near Hurghada on the Red Sea coast.
El Gouna, a fully integrated, environmentally friendly, large-scale tourism development, is rapidly emerging as a popular local and international resort destination on the Red Sea coast. The current phase of expansion will help El Gouna meet the growing demand for quality tourism facilities. IFC’s investment in OPTD will be key to financing critical investments in infrastructure. The facilities at El Gouna, which already include two international quality hotels, three smaller hotels and a growing town center, will be expanded over the next three years to include two more international hotels, three more smaller hotels, a golf course, a marina, a medical facility and all utilities (power, water, sewage treatment) required to service the expanded development.
IFC’s financing consists of a loan of US$20 million for its own account and an equity investment of US$5 million. The financing package will enable OPTD to implement the current phase of its planned expansion, estimated to cost over US$100 million. Part of IFC’s long-term loan will be used to restructure the existing short-term debt of the company.
OPTD is owned by the Sawiris family, a well-known business family in Egypt and owners of Orascom, one of the largest construction companies in the country. OPTD’s shareholders also include Al-Ahli for Development and Investment, a local investment company and Commercial International Investment Company, the investment arm of Commercial International Bank.
Mr. André Hovaguimian, Director of IFC’s Central Asia, Middle East, and North Africa Department said, “IFC is very pleased to be associated with this investment, which is expected to contribute substantially to the expansion of the country’s tourism sector and be a model for other similar projects. Tourism is Egypt’s largest foreign exchange earner and generates significant employment in the country,”
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
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