IFC Investment to Support Egypt’s Tourism Sector
AA – IFC, a member of the World Bank Group, will provide up to $20.5 million in loans to Credence Hospitality Developments, part of an effort to support Egypt’s tourism sector and help boost job creation and economic growth in the North African country.
The financing will support Credence’s efforts to expand and refurbish an existing 950-room beach hotel in the Red Sea resort town of Hurghada. Credence plans to add 378 rooms to the development. The financing, which will be committed as two consecutive loans, will also support the construction of three hotels in the Cairo catering to extended-stay corporate travelers. The hotels are expected to be among the most eco-friendly in the country, using at least 20 percent less energy than traditional developments.
“This investment will help us provide world-class accommodations to foreign and local visitors, supporting the recovery of the vital tourism sector,” said Islam Mahdy, Credence Chief Executive Officer. “It will also support our efforts to push the bounds of green building in Egypt.”
Tourism accounts for 15 percent of Egypt’s gross domestic product and employs 11 percent of workers.
“Continuing to support vital sectors like tourism is crucial to boost economic growth and create much needed jobs. We believe this sector has considerable long-term potential, but needs support from key players to demonstrate its viability to investors despite ongoing challenges,” said Nada Shousha, IFC Country Manager in Egypt.
Hurghada is the third largest city in the Red Sea area, and one of Egypt’s fastest-growing tourist destinations. It handles 34 percent of the country’s tourist arrivals. In addition to the 700 people currently employed by Credence in Hurghada, the project is expected to create 600 additional permanent jobs as well as temporary construction-related positions.
The initiative is part of IFC’s wider efforts in Egypt to create jobs and drive sustainable economic growth. Between fiscal years 2011 and 2015, IFC’s investments in the country totaled close to $1.2 billion, including mobilization. Those investments covered 18 projects across a host of sectors, including financial markets, infrastructure, oil and gas, agribusiness, manufacturing, and health care.
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