The Sponsors are two Nigerian entrepreneurs, Koye Edu (50%) and Gbolly Balogun (50%). Mr. Edu, a lawyer specializing in commercial and intellectual property matters, worked for Irving & Bonnar (an ex-IFC local counsel) in association with Bentley Edu & Co. for ten years before starting his own firm, Jackson, Etti & Edu, in 1996 with two other partners. Mr. Balogun is an entrepreneur and property developer/manager with a good track record. The Sponsors started MPL in 1996 with a primary focus in property development and asset management.

The total Project cost is estimated at $37.4 million. The proposed IFC investment is $7.5 million senior loan in AMHL for IFC’s own account and $7.4 million equity in MPL for IFC’s own account.

14.90 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	7.50
Equity	7.40

* These investment figures are indicative

The AMHL hotels will be located in Lagos and Ibadan cities of Nigeria. The proposed sites for Lagos and Ibadan are greenfield locations, close to business establishments and major roads. The Travel house budget hotels will be located in and around Lagos city.

The proposed Project will (i) bridge the supply gap for high quality under-served hotel markets in major business cities in Nigeria which is presently met with sub-standard accommodation and guest houses, (ii) contribute to the improvement of the business infrastructure of the country, (iii) create significant job opportunities to the local people and linkages with other sectors of the local economy many of which are SMEs, both during Project implementation and ongoing operations, such as small contractors, building material suppliers, agricultural and food processing, textiles manufacturers, etc, (iv) encourage improvements in the standards of existing hotels and transfer of hotel management expertise and training of the local staff, and (v) the Project has the potential to provide a demonstration effect and kick off the development of a mid and budget market hotel segment in Nigeria.

It is also important to note that international chains assure guests of an established product and service quality; often encourage broad improvements in the standards of existing hotels; and provide staff with compensation usually above local norms.

IFC will provide;

Long-term financing using a mix of equity and debt financing that is difficult to obtain in Nigeria, especially for Projects involving chains of small hotels provide to the Project; and in the current global financial crisis;
Credibility in attracting other financiers through IFC’s expertise as a Project financier;
Valuable insight and advice as the Company seeks to expand its scope across Nigeria which will improve the Project''s viability as MPL enters unique and diversified under-served markets such as Ibadan, where no international hotel brands exist.

Support to local entrepreneurs, with their concept to provide affordably priced and important business infrastructure to improve the overall investment environment in the key commercial cities of Nigeria; and
Environment and social expertise that will play an important role in bringing the life and fire safety standards of all the hotel facilities to international standards.

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 that may result will be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. IFC’s review of this Project consisted of a document review, including the mandatory Environmental Impact Assessments as undertaken for the various existing developments, site visits to existing facilities including those being considered for new developments, and discussions with the client representatives.

Generally all of the existing developments occur within established urban areas on sites previously disturbed or developed, and this similarly applies to the new proposed developments being considered. IFC’s review of the existing developments (including those under construction), determined that these are generally compliant with IFC requirements.

A number of potential issues associated with the Project were identified including:

Ensuring compliance with IFC standards in the event that the facilities are located on occupied sites e.g. by informal traders;
Occupational Health and Safety during the construction phase;
Management of liquid and solid waste during the operational phase; and
Ensuring design and construction in accordance with the requisite Fire, Life and Safety standards.

Implementation of the Project Environmental and Social Action Plan will ensure these issues are adequately addressed so as to ensure compliance with IFC requirements at existing and new developments.