Nairobi, June 21, 2006
— The International Finance Corporation, the private sector arm of the World Bank Group, today signed an agreement to provide $7.3 million to support Panari Centre Limited or “Panari”, a leading hotel and shopping centre in Nairobi, Kenya.
IFC’s investment will support Panari’s sponsors in their first investment in the hospitality sector by refinancing some of its existing loans with financing in a currency and with tenors that better match Panari’s income currency and the long-term nature of its business. Panari will use IFC’s long-term loans to finance its permanent working capital needs and upgrade its facilities according to IFC’s environmental guidelines. IFC’s investment will help bring corporate governance improvements to Panari, thus helping the sponsors to expand within the country.
Dimitris Tsitsiragos, Director of IFC’s Global Manufacturing and Services Department, commented, “New hotels take time to establish themselves and thus are outperformed by more established hotels for several months. In Panari’s case, this timeframe was short, as the hotel has achieved promising operational and financial results since it began operations in July 2005.”
Panari is the first new hotel built in Nairobi within the last ten years. It is the only one that provides retail and entertainment options for its customers, and is supporting the development of the city, an increasingly important regional hub for business, conference and travel tourists. The shopping centre contributes to the rapidly expanding local retail sector by providing modern facilities and entertainment options, including the only ice-skating rink in East Africa.
Bhagwanji Ratna, Chairman of Panari, commented, “IFC is supporting the long-term viability of Panari by providing long-term US Dollar financing not available in the country, and expertise to enhance Panari’s shopping mall operations, corporate governance practices, and HIV/AIDS prevention programs.”
Richard Ranken, Director of IFC’s Sub-Saharan Africa Department, added, “This transaction fits well with IFC’s strategy in Kenya to provide long-term financing to companies in crucial sectors such as tourism and retail. In addition, supporting local sponsors is a priority for IFC.”
Panari is owned by Arjan and Samji Naran Hirani, and by Bhagwanji and Pushpaben Ratna. Along with the Panari Centre Limited, they own Panari Enterprises Limited, a small real estate developer in Nairobi.
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing and transition 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 FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries.
