Washington, DC, May 12th, 2005
— The International Finance Corporation, the World Bank
Group’s private sector financing arm, will provide up to $150 million to help tourism companies recover in tsunami-affected countries. These loans will offer speedy assistance and long-term funding to help hotel and resort operators rebuild in time for the next peak tourist season.
The facility focuses primarily on tourism companies in the Maldives, Sri Lanka, and Thailand, where the tsunami caused significant damage to popular tourist areas. The loans will be granted on commercial terms and are aimed at established hotel companies that require substantial amounts of capital for reconstruction or refinancing. Typically, the firms are committed to sound social and environmental policies, with a positive track record in operations and a portfolio of properties catering to different segments of the market. Prospective clients can expect to receive funds within eight weeks of applying for a loan.
“We are pleased that discussions are well advanced with some companies, but we are still inviting others to come forward,” said Iyad Malas, IFC’s director for South Asia.
The new financing opportunity comes at a critical time, four months after the tsunami in December 2004. The industry is recovering, but tourist traffic remains below pre-tsunami projections. By providing long-term financing to firms with good operating prospects, IFC aims to help accelerate the recovery and restore operator and investor confidence in the sector. The facility is also expected to help create employment opportunities after the tsunami destroyed more than a quarter of a million jobs in the short-term.
“The facility will have a strong economic impact on the affected areas, where tourism is an important industry,” said Javed Hamid, IFC’s director for East Asia. “It will help preserve and create jobs in tourism and related sectors and promote the adoption of better environmental and insurance practices.”
IFC’s facility is part of a larger effort by the World Bank Group to aid tsunami recovery, and it complements the efforts of governments and other international organizations. It follows IFC’s $2.5 million Matching Grant Scheme, which was announced right after the tsunami to support the immediate relief efforts of partner companies in affected areas.
The mission of IFC
(
www.ifc.org
) 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 FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
