WASHINGTON, D.C., June, 23, 2004
– The International Finance Corporation, the private sector arm of the World Bank Group, today announced a $7 million investment agreement with the Aga Khan Fund for Economic Development (AKFED) to help finance the restoration and expansion of the Kabul Hotel, Afghanistan.
IFC’s investment fits with its strategy of investing in key hotel projects in frontier countries, which can play a vital role in the development of business infrastructure, and, over the longer term, tourism as well. The Kabul Hotel has been in a major state of disrepair, owing to Afghanistan’s recent legacy of successive wars, and dislocation from the international community.
The renovation and expansion (into a five-star deluxe 180 rooms facility) of the Kabul Hotel, costed at $28 million, will give Afghanistan its first international standard hotel. It will be run by AKFED’s hotel subsidiary, Serena Tourism Promotion Services, as the Kabul Serena Hotel. The first phase of expansion is expected to be completed by end-2004.
Prince Amyn Aga Khan, Chairman of AKFED's Executive Committee, and who is intimately involved with the creation and operations of the Serena Group of hotels, said, "Serena has a long-standing and close relationship with IFC in its hotels throughout East Africa. I am delighted to see this co-operation now being extended to the Kabul Serena hotel, which is destined, I hope, to play a major role in the economic and social life of Afghanistan."
Sami Haddad, IFC Director for the Middle East and North Africa, added, “IFC is committed to supporting the reconstruction strategy of the government of Afghanistan, which includes enabling private sector development.” He noted, “IFC expects that this investment will provide a powerful demonstrative effect to the international investor community, and help spur much-needed wealth and job-creating private capital inflows into Afghanistan.”
AKFED, based in Geneva, Switzerland, is the economic development arm of the Aga Khan Development Network (AKDN), a group of development agencies working in health, education, culture and rural and economic development; AKDN has been active in Afghanistan since 1996. AKFED helps develop economically-viable companies by simultaneously making equity investments and transferring management and technical skills into those enterprises.
It operates as a network of affiliates, with more than 90 separate project companies employing over 15,000 people and controlling assets of more than $1 billion. IFC has made investments with AKFED in over 20 private sector projects in Africa, Central Asia, Middle East and North Africa, and South Asia – most recently in the First MicroFinance Bank of Afghanistan in January 2004.
The mission of IFC (
) 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, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.