PROJECT

Projects

Summary of Proposed Investment

Project Number

8766

Company Name

Inversora Internacional Hotelera, S.A.

Date SPI Disclosed

Feb 23, 1998

Country

Dominican Republic

Industry

Tourism, Retail and Property

Status

Completed

Sector

Resort Hotel (Including Lodges)

Department

Regional Industry MAS LAC & EUR

Environmental Category

B - Limited

Previous Events

Approved : Apr 20, 1998
Signed : Sep 8, 1998
Invested : Nov 23, 1998

Project Description

Summary Of Project Information (SPI)

Project NameDominican Republic: Occidental Flamenco Bávaro
RegionLatin America and Caribbean
Sector
Project No008766
Projected Board DateMarch 31, 1998
Company NameInversora Internacional Hotelera, S.A. (“Intertel”)
Technical Partner and/or Major Shareholders

Occidental will manage the hotel’s construction process and will oversee the work of sub-contractors. The project’s ownership will be as follows: 25% by Occidental Properties, B.V., Occidental’s real estate company based in Rotterdam, the Netherlands; 25% by Caja de Ahorros y Pensiones de Barcelona (“La Caixa”), the largest Spanish savings bank; 25% by Orisa Holding Ltd., a company established in Panama; and 25% by Taradale Developments Ltd. based in the British Virgin Islands.

Project Cost Including Proposed IFC Investment

Total project cost is estimated at US$56.0 million, of which IFC proposes to provide a senior “A” Loan of US$6.3 million for its own account, a senior “B” Loan of US$21.7 million for the account of participants, and a quasi-equity investment of US$7.7 million in the form of a subordinated income participating loan for IFC’s own account.

Location of Project and Description of Site

The hotel will be constructed at Playa Bávaro, near Punta Cana, on the east coast of the Dominican Republic’s. T he location, which is known for its high quality beaches, offers an ideal Caribbean vacation atmosphere and adequate infrastructure, including a nearby international airport.

Description of Company and Purpose of Project

The project will consist of the construction of the Flamenco Bávaro resort, an 853-room four-star hotel to be located near Punta Cana. The hotel will be built, owned, and managed by companies affiliated with Occidental Hoteles, a leading Spanish hotel chain which is active in the Dominican Republic. The project is being undertaken to capitalize on the strong growth in tourism in the Dominican Republic and on the popularity of the Flamenco Puerto Plata, an existing Occidental hotel in the Dominican Republic which was expanded in 1993 with IFC assistance (IFC/R93-43). With the continued growth of tourism to the Dominican Republic and the popularity of Occidental’s existing properties in the country, the project represents a natural next step as tour operators have expressed strong interest for the Group to build a property similar to the Flamenco Playa in the Punta Cana area. Punta Cana is the fastest growing resort area within the Dominican Republic and is a destination where Occidental has previously had no presence.

IFC’s involvement is important to the project’s implementation, as alternative sources of long-term project financing are virtually unavailable in the Dominican Republic. In addition, unlike other island economies, tourism has significant linkages to the rest of the economy in the Dominican Republic (e.g., some 90% of the food and beverages served at the hotel will be produced domestically). This project is expected to provide direct employment to approximately 750 employees while indirect employment is estimated at approximately 2,000 jobs.

Environmental Category and Issues

This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Environmental, health and safety issues associated with this Project include past and present land use; sewage treatment and disposal; liquid and solid waste disposal; construction impacts; direct and indirect impacts on coastal resources and habitats; sustainable water supply; CFCs; employee safety training and emergency response; and fire protection measures. The hotel will be equipped with an on-site waste water treatment plant and the Company is working with the Hotel Association of Playa Bávaro to identify a possible location for a sanitary landfill away from residential areas. The construction of the hotel is not expected to affect the project’s environment including the nearby mangroves. The Company and the Hotel Association will jointly perform an evaluation of the aquifer that supplies water to the area to ensure proper usage of the aquifer. All employees will be provided with the necessary safety training and procedures and the hotel facilities will be designed to meet NFPA standards. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines through periodic reports and supervision.

The is available from the Public Information Center.
Date SPI sent to InfoShop February 23, 1998

“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”

For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).

Sponsor / Cost / Location