Egypt - 2009 - Tourism - Med Taba

Financing the construction of a hotel in the Sinai

 

Project start-up: 2009
Financing: €23M senior loan
Partner: Med Taba for Hotels
 
Context
 
Tourism is a vital sector for Egypt’s economy and tourist activities are on the rise in the country with average annual growth at 15% since 2002.
ORASCOM Hotels & Development is a company listed on the Cairo Stock Exchange and a key player in Egypt’s tourism sector. It has launched a project, alongside its financial partner ROLACO, to create a hotel in Taba in the Sinai in Egypt.
 
 
 
 
Project objective
 
The project aims to boost tourism in Egypt, particularly in the region of Taba which is a sensitive area and unsuitable for agriculture.
This project is in line with PROPARCO’s strategy to support “responsible and sustainable” tourism. ORASCOM is heavily involved in social and environmental responsibility and has, for example, created the first green hotel label in Egypt.
 
Project description
 
The loan allocated by PROPARCO will finance the construction of a luxury hotel complex which will be managed by the French tour operator Club Med and will have a “4-trident” rating (equivalent to 4-star). The hotel is located in Taba Heights, a tourist town created in 2000 in the northern Sinai by ORASCOM Hotels & Development, in the Gulf of Aqaba. The site is hemmed in between the Sinai mountains and the sea and enjoys a great deal of tourist potential for sports and culture (it is near Mount Sinai, Saint Catherine’s Monastery in the Sinai and the site of Petra in Jordan).
The hotel is scheduled to open in November 2010. With 398 rooms, it will have a reception capacity of 935 people and will employ 400 people (client/staff ratio more favorable in top-end tourism than in mid-range tourism).
The partner is implementing a social and environmental management plan. PROPARCO will conduct a compliance audit on this every year.
 
Impacts
 
PROPARCO is the only lender for the project and is contributing to the development of a sensitive area in the Middle East . Taba is located in the Gulf of Aqaba which is at the crossroads between Egypt, Israel, Jordan and Saudi Arabia.
 
The partner aims to boost tourism, create jobs and support economic development in an area which has suffered from the consequences of political crises in the region.

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