|Date SPG disclosed
||May 7, 2008
|Projected Board date
||May 22, 2008
This summary covers an investment by Société Malienne de Promotion Hôtelière in a hotel in Benin’s capital city, Cotonou. The investors have applied for MIGA guarantees totaling up to $10 million for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project involves the acquisition of the Hotel de la Plage in Cotonou, following a competitively bid privatization process. The existing facility will be demolished and a new four-star hotel of international standing will be built in the footprint of the old hotel. The sponsor is Société Malienne de Promotion Hôtelière (SMPH) of Mali, which also holds MIGA guarantees for similar projects in Burkina Faso and Guinea Bissau. For the implementation of the project, SMPH will establish a local company—Compagnie Hôtelière du Golfe S.A. (CHG S.A.). The total cost of the project is €6.1 million.
The existing facility is located along the Atlantic coast in the administrative heart of Cotonou. Despite its prime coastal location, the advanced deterioration of the facility and architectural layout are not conducive to attracting business travelers and tourists. The newly designed facility will cater to business travelers as well as vacationing tourists.
The project is a Category B under MIGA’s environmental review procedures.
The project will contribute to the government of Benin’s efforts to reform its public sector and rehabilitate inefficient state-owned assets. It is expected to provide greatly needed modern hotel facilities, increase the number of visitors through marketing efforts, and contribute to tax revenues and foreign exchange earnings. In addition to the 200 jobs generated during the construction phase, the project will preserve 63 existing jobs and generate an additional 50 permanent jobs. The project is also expected to transfer proven managerial and technical skills from a well-managed hotel group in Mali.
The project addresses three of MIGA’s priority areas: an investment in an IDA-eligible country, which is among the world’s poorest; an investment in an African country; and a South-South investment. The project will be underwritten through MIGA’s Small Investment Program.