Washington, D.C., May 16, 2005
—The International Finance Corporation, the World Bank Group’s private sector financing arm, will provide up to $150 million as loans to companies than can help rebuild commercial tourism ventures in Tsunami affected countries in South Asia and South East Asia.
An IFC spokesperson said, “IFC will clear loan requests on a priority basis and provide long-term funding to help hotel and resort operators rebuild properties that were affected by the Tsunami well in time for the next peak tourist season. This is a good opportunity for companies in the region who would like to receive accelerated long-term loan financing to help rebuild hotel properties in the affected areas in the Maldives, Sri Lanka, and Thailand, where the tsunami caused significant damage to popular tourist resorts.”
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 should be 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 Sanjiva Senanayake, IFC resident representative for Sri Lanka and the Maldives. He added, “The facility will have a strong economic impact on the affected areas, where tourism is an important industry and will help preserve and create jobs in tourism and related sectors. It will also promote the adoption of better environmental and insurance practices.”
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.
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.
