The project is 100% owned by AKFED (the “Sponsor’), an international development agency dedicated to promoting entrepreneurship and building economically viable enterprises in the developing world, headquartered in Geneva, Switzerland. AKFED is part of the larger Aga Khan Development Network (“AKDN”), a group of development agencies, in approximately 90 separate companies, engaged in health, education, cultural, rural and economic development. AKFED, with whom IFC has a long established and close working relationship, is already actively involved in the rehabilitation of the energy, agricultural, health and education and hotel sectors. AKFED has extensive experience in owning, managing and operating high-end hotels/lodges through its subsidiary Tourism Promotion Services (“TPS”) in several developing countries. TPST will be managed and operated by TPS under its “Serena” brand.

The estimated total cost of the project is $37.8 million. The proposed IFC investment is an A loan of up to $7 million.

7.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	7.0
Equity

* These investment figures are indicative

The project will be located on Rudaki Avenue, a thoroughfare in the heart of Dushanbe that is surrounded by key government and civic buildings, and is a 10 minute drive from the City’s airport. The enclosing area also includes a mix of academic institutions, retail/wholesale and residential properties and the National Museum.

The project is expected to:

- develop essential business infrastructure in order to help address the lack of quality accommodation facilities in Dushanbe by developing an essential part of the city’s business infrastructure;

- enhance the local supply chain to create linkages with the rest of the economy;

- create employment and provide training to local staff during the construction and operation phases. After the opening, the Company estimates that it will employ 135 people, of which, 80% will be local and 20% will be expatriates. It will also provide additional employment with multiplier effects along the supply chain. Moreover, TPST will provide extensive training to local staff in hotel and hospitality management at its other facilities in the region.

- generate government revenues in the form of value-added taxes ("VAT"), property and other taxes; and

- improve life, fire and safety standards by adhering to IFC’s life, fire and safety standards which will improve the hotel’s safety and is expected to set a best practice benchmark for other hotel developments.

IFC’s main role in the project is to:

- provide long-term financing in tenors and amounts that are not available elsewhere;

- provide comfort and assistance to AKFED as it implements its first hotel project in Tajikistan. The financing also sends a positive signal to the market at a time when additional capital is required for the post-war reconstruction efforts;

- strengthen its long-term partnership with AKFED while collaborating on investment opportunities;

- identify and address potential areas for improvement in life, fire and safety; and

- advise TPST on additional insurance coverage on advance loss of profit and marine transportation for critical equipment.

This is a Category B project, applicable Performance Standards are as follows:

- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security

Since the project is located within the city center and is surrounded by government, educational and cultural institutions and a number of residential properties, the appraisal also included an assessment of issues related to PS5: Involuntary Resettlement and PS8: Cultural Heritage.

The following key environment, health, safety and social impacts were analyzed:

- Social and environmental assessment and management systems
- Labor and working conditions
- Energy efficiency and conservation of resources
- Hazardous materials, waste and effluence management procedures
- Life, fire and safety standards

IFC’s evaluation included:

- discussion and review of TPS’s approach to project design and management of the facility;
- review of property and land use rights/permits and documents;
- review of the project’s structural design and drawings and geological engineering report;
- review of the contractor’s environmental, health and safety management systems and documents (including policy and procedures, emergency plan, list of legal requirements, health and safety weekly reports, accident prevention, safety and security plans specific to the project site);
- visits to the project site and to the construction labor camp;
- meetings with the TPS and TPST’s Project management teams as well as the construction contractors responsible for environmental and social management activities; and
- an assessment of the Sponsors community engagement activities and IFC’s previous experiences with similar projects owned by the sponsor.