Washington D.C., June 13, 2002
—The International Finance Corporation, the private sector development arm of the World Bank, will support the expansion of Turkey’s tourism and business travel infrastructure with a US$3.5 million loan to a leading Istanbul hotel. The loan will be used to help finance the creation of a new conference/business center and the refurbishment of existing rooms.
The investment in the Conrad Hotel, a high-end establishment overlooking the Bosphorous Strait, will support a tourism complex that employs some 400 full-time staff, provides significant foreign exchange earnings for Turkey, and forms an important part of the country’s tourism infrastructure. The tourism industry - a leading creator of jobs - is vital to Turkey’s economy, with total revenues in 2001 of more than $8 billion.
“The Conrad Hotel has effectively served tourist and business travel market since it opened its doors in 1992,” said Khosrow Zamani, IFC Director for Southern Europe and Central Asia. “The evolution and expansion of the Turkish hotel industry remains fundamental to the growth of tourism and business travel. The creation of a new business/conference center will create a new revenue stream for the Conrad Hotel and help protect against occasional dips in conventional tourism. The investment reflects our continued commitment to supporting Turkey’s private sector as it recovers from the recent financial crisis. As the country embarks on a growth plan, we will continue to grow our role in Turkey,” Mr. Zamani added.
The total $8.8 million project will improve the hotel’s competitive position for attracting mid-sized conferences, create revenue streams from previously unused property space, and provide higher margins and occupancy rates.
The loan to the Conrad Hotel - the first IFC tourism sector investment during this period of recovery since April 2001 - marks IFC’s third investment in the Conrad since its founding. Aksoy Group, a Turkish family-owned enterprise with diverse business interests, is currently the leading shareholder of the hotel (49 percent). The technical sponsor, holding a 25 percent shareholding, is Conrad International Corporation, the overseas arm of Hilton Hotels Corporation of California. The Turkish Social Insurance Fund and State Employees Pension Fund are institutional investors each holding a 15 percent and 11 percent shareholding respectively.
The IFC investment marks the Corporation’s tenth Turkey investment in less than a year. Since April 2001, IFC has invested more than $350 million in a wide range of companies and financial institutions to help weather the current economic difficulties. The investments have been aimed at boosting export revenues, improving efficiency, expanding production, and replenishing working capital.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
