Moscow, Russia, July 13, 2010
— IFC, a member of the World Bank Group, and the European Bank for Reconstruction and Development today signed an agreement with entities representing Turkish investors to raise over €45 million in debt to support the development of five mid-market hotels in four regional cities of Russia.
The project is expected to improve the availability and the standard of hotel services to travellers and contribute to the improvement of the business infrastructure in Samara, Kaliningrad, Yaroslavl, and Krasnoyarsk , with a total capacity of 750 rooms.
IFC and EBRD signed the agreement with Russian Hotel Investments
,
a company set up in Russia for the construction of the hotels, representing the interests of a group of Turkish investors including Akfen REIT, part of Akfen Holding, and Kasa Construction, one of the important contractors in the Russian Federation, controlled by the principals of Turkey’s Kayi and Insa groups.
“We are pleased to support an investment from one emerging market to another”, said Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services. “Developing a mid-market hotel chain in Russia’s regional capitals will substantially expand availability of business infrastructure and send a positive signal to other foreign hotel investors who are considering investments in Russia.”
Cuneyt Baltaoglu, representing Russian Hotel Investments said: “We are glad to have the support of IFC and EBRD, and are eager to expand our business from the initial five properties into a larger hotel portfolio in Russia within the coming seven years.”
IFC and EBRD have provided €22.6 million in debt financing each for the project.
To improve operational efficiency of the Russian Hotel Investments B.V., IFC will use its global hotel sector expertise to help the company develop and adopt formal risk mitigation measures, introduce sound environmental and social practices, and improve corporate governance standards.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totalled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
.
