The project is co-sponsored by IFA Hotels & Resorts KSCC (IFAHR) and Kingdom Hotel Investments (KHI). IFAHR and KHI own 70% and 30%, respectively of the project company. IFAHR is a Kuwait based tourism and real estate development company active in the Middle East, Europe, the Indian Ocean region, Africa and Far East. Its main shareholder is International Financial Advisors Co, KSC (IFA), a leading investment company established in 1974 and publicly traded on the Kuwait Stock Exchange. KHI is a private equity group engaged in the hospitality and leisure business mostly in the Middle East and Africa.

The total project cost is estimated to be about $20 million. The proposed IFC investment is a $10 million A loan for IFC’s own account.

11.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	11.0
Equity

* These investment figures are indicative

The hotel is located on the north-east coast of Zanzibar, about 50 km north east of the commercial center of Stone Town. The site comprises a 10.8 hectares plot with 450 meters of beach frontage and extends 220 – 280 meters inland from the high water mark, in an area zoned for tourism development by Zanzibar authorities.

The archipelago of Zanzibar is located 40 nautical kilometers (25 nautical miles) off the coastline of mainland Tanzania. With its warm sandy beaches, spice aroma, water-sports and old Arab architecture, the potential for tourism in Zanzibar is considerable. However, the tourism infrastructure is still largely under-developed including a shortage of quality hotels. The proposed project will have an important development impact and demonstration affect with the establishment of an international standard resort managed by a well known hotel operator, which will help attract new visitors as well as tour operators and airlines. The project is expected to result in transfer of international best practices in hotel operation and management. The project will also provide jobs both directly and indirectly during the renovation and once the hotel becomes operational along with extensive industry-specific training. Once operational, the hotel is expected to have 220 full time employees including about 90% local staff.

IFC would provide long-term debt (up to 9-10 year maturity) on commercially attractive terms to the project. IFC’s Environmental Department will also evaluate standards and safeguards with respect to health, fire and safety standards, and provide necessary support to bring the property to international standards.

IFC''s review of this investment has identified the following environmental, social, health and safety issues: management of the company’s environmental, health and safety, and social performance; life and fire safety in design, construction and outfitting of new and existing facilities; potable water supply, usage and disposal, sewage treatment, solid waste disposal and maintenance of good community relations.

IFC Performance Standards and Environmental Health & Safety Guidelines applicable to this investment include the following:

- PS1 -- Social and Environmental Assessment and Management System
- PS2 – Labor and Working Conditions
- PS3 – Pollution Prevention and Abatement
- PS5 – Land Acquisition & Involuntary Resettlement

The following guidelines apply to this project:

- IFC Life & Fire Safety Guideline
- IFC Tourism & Hospitality Development Guideline

Based on this review, this project will require thirty (30) days disclosure by IFC prior to Board and has been categorized as B.