IFC, FMO join hands to invest in Nepal hospitality
IFC – a member of the World Bank Group – will invest $3million in Nepal Hospitality and Hotel (NHH) to develop a three-star hotel in Thamel, Kathmandu.
The investment will increase the country's capacity in the mid-market hotel segment, create jobs, and promote energy-efficient hotel design. The Greenfield hotel will be operated by international chain Marriott under its Fairfield brand.
NHH a member of MS Group is one of the leading business conglomerates in Nepal.
The IFC will – in addition to its own investment – mobilise $3 million from FMO, the Netherlands-based development bank. The investments will help build skills of those employed in the sector and contribute to the development of local supply chains.
IFC will also help Nepal Hospitality and Hotel adopt green building design and construction principles to implement energy and water-efficiency measures.
“The deal, amidst the recent earthquake, reaffirms that the Nepali private sector, IFC, and FMO are committed towards economic prosperity in Nepal," said managing director of Nepal Hospitality and Hotel Gaurav Agarwal, on the occasion.
The 110-room Fairfield Kathmandu – the first internationally-branded, professionally-managed mid-market hotel in Nepal – will stimulate tourism and support the economy, he said, adding that the green building design will serve as a model for replication across the industry.
"The hotel will be built with a total investment of $12 million," he said, adding that they have already completed the structural work. "Likewise, electrical wiring and plumbing work is 80 per cent complete."
The finishing work is 20 per cent complete and for the remaining finishing work we need skilled manpower, which is currently no available in Nepal," Agrawal added. ""Even though, the 10-story hotel has been rated as three-star by the government. Our services will be on par with four-and five-star hotels in Nepal."
The hotel had earlier planned to begin operation in October but it has postponed for early 2016 due to devastating earthquake on April 25.
The MS Group is also constructing a five-star hotel in Naxal, Kathmandu for which it will invest Rs 350 million.
"IFC remains committed to supporting Nepal as it rebuilds its tourism industry following the devastating earthquake on April 25," IFC country manager for Bangladesh, Nepal and Bhutan Kyle F Kelhofer said, after signing the deal. "Investments that support vital economic industries like tourism, will send a strong signal to international investors that Nepal is poised for growth and is an attractive destination that continues to cater to traveler needs,” he added.
The tourism sector accounts for over two per cent of Nepal's GDP, some five per cent of foreign exchange earnings, and employs approximately half a million people. It also supports significant employment in ancillary industries.
International-standard hotel projects help emerging markets like Nepal attract business and leisure travelers.
The FMO – a Dutch development bank – has invested in the private sector in developing countries and emerging markets for more than 45 years aiming at empowering entrepreneurs to build a better world.
Likewise, IFC – a member of the World Bank Group – is the largest global development institution focused exclusively on the private sector. It works with private enterprises in more than 100 countries using its capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity.