26113 - Zara II

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Summary of Proposed Investment

Project Number

26113

Company Name

ZARA INVESTMENT HOLDING CO. LTD

Date SPI Disclosed

Jun 20, 2007

Country

Jordan

Industry

Tourism, Retail and Property

Projected Board Date

Jul 23, 2007

Status

Completed

Sector

Resort Hotel (Including Lodges)

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Feb 28, 2008
Signed : Feb 28, 2008
Invested : Jun 19, 2008

Project Description

Zara Investment (Holding) Company (Zara or the company) is hotel holding company in Jordan and an IFC client since 1996. The project involves funding Zara’s current expansion program and assisting in improving its balance sheet that has been affected by the instability in the region. Specifically, IFC’s corporate loan will be:

- for partial financing of the Zara’s hotel at Tala Bay -- a four-star 450 room hotel in Tala Bay Resort on the Red Sea near Aqaba, along with other potential expansions in Jordan; and
- for re-profiling some of the company’s existing debt.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	40.0
Equity

Development Impact

The project will improve and facilitate diversification of tourism benefits throughout the country helping the tourism industry coming out of a difficult period. The project will result in job creation, foreign currency revenues and in further growth in the tourism industry and other related sectors. In addition, the project will support implementation of government’s National Tourism Strategy.

IFC will support an existing client in its recovery from the effects of volatility in the tourism industry affected by the regional and global events, in expansion in new destinations, and in consolidation of its leadership role in tourism in Jordan. Specifically, IFC’s investment will provide much needed long-term funds not otherwise available that would support Zara’s long-term development plans and help smoothen the ups and downs in Zara’s operational cashflows – an outcome of volatility of Jordan’s hotel industry. The IFC financing will also assist in re-profiling Zara’s balance sheet that has been affected by the instability in the region. Finally, IFC’s involvement will strengthen compliance with environmental and social guidelines.

Key environmental and social issues at all properties are environmental and social management structures, labor and working conditions, emissions to air and water, use of energy and water, life and fire safety, and possible public health impacts arising from swimming pools, and hotel food and water. Potential impacts of the Petra properties upon the Bedul Bedouin and upon cultural heritage are considered, while possible impacts on biodiversity are considered in the case of the Tala Bay Hotel and the Dead Sea property. The process of land acquisition for the Tala Bay project was also considered.

Contacts

For Inquiries About the Project, Contact

Ms. Lina Annab, General Manager
Zara Investment (Holding) Co Ltd
P.O.Box 5315, Amman 11183, Jordan

Telephone: +962-6-4646781
Fax: +962-6-4646782
Website: www.zaraholding.com

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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