The sponsor is AKFED and its subsidiary, STPS, now operates 20 hotels in Kenya, Tanzania, Mozambique and Pakistan under the Serena brand. As in other hotel projects, STPS has established a separate company in Afghanistan, TPS(A) for the purpose of implementing this project. AKFED is an economic development agency headquartered in Geneva, Switzerland that helps develop economically viable enterprises through equity participation combined with management and technical expertise and support. AKFED is part of the larger Aga Khan Development Network (AKDN), a group of development agencies working in health, education, culture and rural and economic development. AKDN has been active in Afghanistan for a number of years and has a strong local presence.

Total project cost is estimated at $27.8 million. IFC’s proposed investment is a loan of up to $ 7 million.

7.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	7.0
Equity

* These investment figures are indicative

The project is located in downtown Kabul on Bank Street, across from the Central Bank, and adjacent to Zanegar Park, which will be maintained as a green area. The existing Kabul Hotel currently occupies this site and a new building will be added within the hotel grounds as part of the expansion. To further enhance the quality of the neighborhood in the vicinity of the hotel and facilitate a higher level of security around the hotel , the whole of Bank Street along the boundary of the hotel will be dedicated as a pedestrian zone.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of projects. The environmental, health, safety and social issues associated with this project are described in the Environmental Review Summary.
Location of environmental documents in locally affected community
The completed ERS in English and Farsi will be made available at the TPS(A) office in Kabul.

The development impact associated with the project is strong: The hotel will: - address the lack of accommodation facilities in Kabul to meet the needs of diplomats, government workers, aid organizations, media, NGOs and potential business investors visiting the city. As such it will comprise an essential part of the city’s business infrastructure by providing international standard facilities/services; - provide reliable food & beverage services, business center facilities, communications, meeting rooms, etc., for visitors to Kabul; - restore an architecturally and historically significant building in Kabul and improve this area of the city; - generate much needed foreign exchange for the country and provide revenue to the government by way of import duties, lease payments and taxes; - create linkages with the rest of the economy for building materials, food and beverage and other ongoing operating supplies which will strengthen as the economy diversifies; as well as - provide numerous jobs both during implementation and operations. During implementation, Afghan workers will be used for unskilled and semi skilled labor as well as supervisory positions and craft work. Extensive hotel training will be provided by Serena to maximize the number of Afghanis employed once the hotel is operational. IFC’s primary role will be to provide long-term debt financing which is virtually unavailable for private sector projects in the country currently. The project will have a strong demonstration effect as: - one of the first private sector foreign investments in the country, with all of the related challenges, and laying critical groundwork for future private investment in hotels and other sectors, and - one of the first major building projects in the city’s reconstruction program. IFC's involvement will also ensure compliance with World Bank environmental and social guidelines as well as international standards for fire and life safety.