Washington, DC, August 29 2005.—
The International Finance Corporation, the private sector arm of the World Bank Group, will provide a senior loan of up to $29.5 million to Sofia Kyiv Hotel. The financing, which includes a B-loan of up to $13 million, will be used to complete the construction of a high-quality hotel in Kyiv’s city center. The project’s investor is Industrial Union of Donbass, a large Ukrainian industrial group whose main activity is the production and trading of steel. The hotel will be operated by Hyatt International under the Hyatt Regency brand name.
The project will have a positive effect on the Ukrainian tourism sector by transferring Hyatt’s first-class hotel management methods and environmental best practice standards. As there is a strong demand for well-managed business hotels in Kyiv, customers will benefit from the hotel’s promotion of high quality standards.
Edward Nassim, IFC’s Director for Central and Eastern Europe, noted, “IFC is committed to providing long-term funding to domestic investors in Ukraine. This loan will help the investors expand their business and better pursue their opportunities.”
Dimitris Tsitsiragos, IFC’s Director for Global Manufacturing and Services, commented, “Our investment will play an important role in addressing a real market need for business hotels with high quality standards in Kiev, a need that is currently underserved. Through this project we also aim to develop and improve the service delivery of Ukraine’s hotel sector.”
Sofia Kyiv’s Chief Executive, Vitaly Misakov, said, “This hotel will be very attractive for tourists and businesspeople alike, with its prime location in the historic city center, adjacent to St. Sophia Cathedral. It will give further momentum to the city’s economic development.”
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing and transition economies, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the emerging markets, 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 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.
Ukraine became a shareholder and a member of IFC in 1993. Through the end of fiscal year 2005 (June 30, 2005), IFC has invested $335 million in 18 projects in the country. IFC expanded its investment program in Ukraine significantly in 2004-2005, committing $255 million in the agribusiness, financial, and general manufacturing sectors. IFC has also been conducting an extensive advisory program since 1992, which initially focused on the privatization of small businesses, land, and idle construction sites. Current donor-funded programs offer advice on corporate governance, leasing, and agribusiness. Programs also seek to improve the business environment and promote the growth of small and medium enterprises.
