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Summary of proposed guarantee

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
HBD Ecotourism Development
Project ID
10945
Fiscal year
2014
Status
Proposed
Guarantee holder
HBD SGPS, Lda.
Investor country
Portugal
Host country
Sao Tome and Principe
Environmental category
A
Sector
Tourism
Date SPG disclosed
December 19, 2013
Projected Board date
February 21, 2014
Gross exposure
 $82.9 million
Project type
Non-SIP
ESRS
ESRS for HBD Ecotourism Development, December 19, 2013

Project description

This summary covers an investment by HBD SGPS, Lda. of Portugal in HBD Ecotourism Development in Sao Tome and Principe. The investor has applied for a MIGA guarantee of €61.7 million ($82.9 million equivalent) for a period of up to 15 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.

The project is an ecotourism development that includes the refurbishment of a 30-room and a 19-room hotel, the development of two new beach resorts consisting of a 54-room hotel and 15 eco-tents, the construction of a new boutique hotel inland, the construction and operation of a carpentry center, and the construction of a new runway at the Principe airport to accommodate 60-seater planes.

Environmental Categorization

The project is a category A under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary.

Development Impact

Sao Tome and Principe is highly dependent on external support, with over 85 percent of its budget financed by development partners. Both the government and the World Bank Group have indicated that the tourism sector is a key potential driver of employment, growth, and economic diversification. The project’s immediate development impact will be felt in the construction of infrastructure and the creation of direct and indirect jobs in an area with high levels of poverty and few employment opportunities. Currently, HBD provides around 393 direct jobs, which represents about 5 percent of the population of Principe (8,000), and expects to employ a total of 700 at full operation. HBD will also transfer valuable knowledge in tourism, business management, agriculture, carpentry, and masonry through on-the-job and other training programs.

HBD has also contributed approximately €800,000 to support community initiatives.

The proposed project is aligned with MIGA’s strategic objective of supporting investment into countries eligible for concessional financing from the International Development Association.

 
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