Panari is owned by the brothers Mr. Arjan Naran Hirani (40%) and Mr. Samji Naran (40%) as well as by Mr. B. M. Ratna (10%) and his wife Mrs. Pushpaben Ratna (10%), hereafter collectively referred as the “Sponsors”. Along with Panari, the Sponsors own other real estate investments in Kenya, UK and India.

The project cost is estimated at $8.0 million. IFC has been asked to consider providing the company with an up to $5.0 million to $6.0 million facility, comprising a $4.0 million to $5.0 million A Loan for IFC’s own account and an up to $1.0 million income participating C Loan. The remaining $2.0 million to $3.0 million expected to be raised through local banks.

7.30 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	7.30
Equity

* These investment figures are indicative

The investment will be made in the company facility, located between the international airport and the city center on the Mombasa Road, Nairobi, Kenya. The Panari Complex involves an eleven storey facility building with retail shops and leisure facilities in the first three floors and a 137 room hotel between the fourth and eleventh floors.

By refinancing Panari’s debt, the proposed project will help ensure that sufficient cash flow is available to meet the company’s ongoing operational and investment needs will result in a better match between the tenor of the financing and the long-term nature of the assets. As a result, the project would help to sustain the revenue flows, taxes and employment. The employees will receive continuous training, competitive wages and significant non-wage benefits; in addition, they will be supported with an AIDS/HIV prevention and care program. Adherence to IFC environmental guidelines will enhance the existing infrastructure, potentially increasing hotel demand by improved hotel marketability in key international segments and setting a good example for other developments to follow. Finally, the sustainability of Panari may attract other developments to the area, creating a demonstration effect and contributing to the overall community development.

IFC''s primary role will be to facilitate the long-term viability of Panari by providing competitive long-term debt financing, which is not available in the country at the tenors and currency offered by IFC. IFC is also assisting the company to renegotiate its current bank debt with the existing lenders to obtain terms more compatible with a self-sustaining completed project. In addition, IFC is providing technical assistance to augment the fire and life safety standards of the property establishing a positive precedent for other hotels in Kenya. Also, the IFC Against AIDS program will provide support for company’s implementation of HIV/AIDS prevention and care program. Finally, IFC''s involvement will support the Sponsors in their first investment in the tourism sector.

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. Key issues associated with this project include: sewage treatment/disposal; solid waste disposal; power and water supply; employee occupational health and safety; tenant operations; and fire protection and life safety. The sponsor has presented an outline and commitments to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements -the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. An independent fire safety audit of the property is also being performed to meet IFC requirements.