The project is sponsored by Kingdom Hotel Investment Group (“KHI”), Fairmont Hotels, Inc. (“Fairmont”), and International Financial Advisors Hotels and Resorts (“IFA Hotels and Resorts”) (together, known as the “Sponsors”). KHI, chaired by Prince Alwaleed bin Talal of Saudi Arabia, is a private equity group engaged in the hospitality and leisure business mostly in the Middle East and Africa. Fairmont is one of North America's leading operator of luxury hotels and resorts with a distinctive collection. IFA Hotels and Resorts is a Kuwaiti-based tourism and real estate development company active in the Middle East, Europe and Africa. The project’s five hotel properties were acquired by a joint venture formed by KHI, IFA and Fairmont. The following summarizes the shareholders of the joint venture and their corresponding equity interest. KHI - 55% IFA Hotels and Resorts - 30% Fairmont - 15%

The total project cost is estimated at $63.0 million. It includes a purchase price for the hotel properties of approximately $33 million and a refurbishment of the hotels at a cost of $25.6 million. Working capital needs and interest during construction have also been included as part of the project cost. The proposed financial plan includes equity of $33.4 million and cash generation of $4.6 million. Debt financing includes an IFC A Loan of $15 million, an IFC C Loan of US$5 million and a Fairmont loan of $5 million.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

The following is a summary description of each hotel property: - The Norfolk (167 rooms) The Norfolk Hotel has been one of Nairobi's most storied gathering places since it opened in 1904 hosting notables like American President Theodore Roosevelt, Lord Baden-Powell and Baroness Karen Von Blixen-Finecke, better known as Out of Africa author Isak Dinesen. Today, this 167-room hotel 30-minutes from Jomo Kenyatta International Airport continues to provide a sophisticated respite from the bustling nearby business district and an ideal safari departure point, complete with four impressive dining venues, an outdoor heated swimming pool, a full-scale health club, a ballroom and four function rooms. Mount Kenya Safari Club (114 rooms) Located 190 kilometers (118 miles) north of Nairobi, the 115-room Mount Kenya Safari Club showcases magnificent views of neighboring Mount Kenya and a long-held reputation for secluded elegance including a variety of cottages, suites and villas. Spread over 100 acres of landscaped grounds, the property features a nine-hole golf course, heated swimming pool, horseback riding, bird walks, organized trips to game reserves, fishing as well as access to an animal orphanage. Seven restaurant and bar offerings range from casual poolside cocktails to formal dinners accompanied by music and traditional Chukka dancers. Originally the retreat of movie star and Club founder, William Holden, illustrious members have included Winston Churchill, Bing Crosby and John Wayne.. Mara Safari Club (50 room tents) The Mara Safari Club is located at the foot of the Aitong Hills, northwest of the Masai Mara Game Reserve, Kenya's most popular game reserve, on the Ol Choro Oirowua Group Ranch. This expansive lodge with dining room, lounge and pool bar is surrounded by lush gardens clustered around indigenous trees. The 50 tented accommodations include deluxe beds, en suite baths and other features of a top hotel. Guests can choose from a wide range of activities, including game drives, walking safaris, bird walks, fishing and balloon safaris over the Mara plains. A naturalist, traditional dancing and talks on Masai culture enrich this luxurious adventure. The Aberdare Country Club (48 rooms) Described as "Scotland with lions," the unique 1,300-acre setting of the Aberdare Country Club encompasses moorland, thick forests and clear mountain streams. An easy three-hour transfer from Nairobi, this 1930s country hotel was originally built on the slope of Mweiga Hill as the private farm and residence of wealthy English landowners. The hotel's 48 accommodations are in luxurious cottages with spectacular views of the Aberdare Mountains to the west, Mount Kenya to the east and the plains below. Beyond a main lodge dining room with two lounges and a well-equipped conference center, the Club offers a nine-hole golf course, swimming pool, two tennis courts, riding stables, trout fishing and a wildlife sanctuary that abounds with zebra, giraffe, gazelles and even the elusive leopard. The Ark (60 rooms) Built in 1969 to complement the Aberdare Club, The Ark is a tree-lodge set in the heart of Aberdare National Park and uniquely shaped to resemble Noah's Ark. True to its ship-like structure, it overlooks the floodlit Yasabara waterhole and contains 60 "cabins," accommodations with en suite bathrooms. In addition to a main dining room, lounge and bar, this one-of-a- kind safari lodge also features three decks of balconies and a lounge with 24-hour tea and coffee service, providing ideal vantage points for viewing game. A ground-level "bunker" takes you close to the animals for photography and cabins are fitted with buzzers to announce the arrival of the one of the "Big 5" at the forest waterhole.

The project will change the ownership and management, and upgrade the facilities of five hotels and lodges in Kenya. The quality of the services and marketing of the properties will improve as a superior hotel management company, Fairmont, will be brought in to manage the properties. Fairmont will also use its strong brand recognition to increase international bookings for the properties. Labor will benefit as potentially 900 staff will be directly employed. In addition, the development of the properties outside Nairobi will promote conservation by helping preserve the unique natural area and wildlife of the properties. Responsible tourism development such as the proposed project helps prevent the spread of the biggest threat to wildlife areas in Kenya today which is encroachment of agriculture. The project will also contribute to a better environmental management through adherence to IFC environmental and social policies and will set a good example for other lodges in the area. . Through modernization of Norfolk Hotel in Nairobi, the project will also contribute to enhancement of business infrastructure in the country’s capital which is an ultimate necessity for economic development. IFC will play the following roles in the project: Competitive Financing: IFC will provide competitive acquisition and capital expenditure financing with quick turn around time; Catalytic Role: IFC will support the upturn in Kenya’s tourism industry, a major foreign exchange earner and a key sector in the country. IFC will also support an entry of a major hotel investor and manager into the Kenyan market; Promotion of High Environmental Standards IFC will play an important role in raising the environmental standards of the project’s hotel properties and in establishing a positive precedent for other hotels and resorts in Kenya. Sustainable Development: IFC will encourage, through the sponsor, sustainable ecotourism management practices on the Group Ranch. KHI and Fairmont have shown a strong openness and willingness to address community and conservation issues and to be eco-friendly on the waste/water/energy front (solar, wetlands etc.) and have requested IFC to assist with addressing the issues. IFC will be supporting the sponsors efforts to identify the range of environmental, health and safety issues associated with each specific property and action plans for each property are now being developed.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor. The following potential environment, health and safety, and social impacts of the projects were analyzed.

- waste disposal and treatment;
- water and power supply;
- energy efficiency;
- guest and staff safety;
- fire safety; and
- staff training.
Location of environmental documents in locally affected community
IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The ERS will be translated into Swahili and made available locally through the five properties, and the respective local municipal offices of Nairobi, Nanyuki, Ol Choro Oirowua and Nyeri; availability of the document at these locations will be advertised in a national newspaper and notices of it’s availability should be posted at the local municipal offices. In addition oral presentations of the ERS in Maa will be made at Ol Choro Oirowua