MIGA has issued a guarantee of $1.4 million to Société Malienne de Promotion Hôtelière (SMPH), covering its $6.8 million equity investment in Compagnie Hôtelière du Golfe in Benin. The coverage is for a period of up to ten years against the risks of transfer restriction, expropriation, and war and civil disturbance. By July 29, 2016, MIGA discontinued guaranteeing the project at the request of the guarantee holder.
The project involved the acquisition of the Hotel de la Plage in Cotonou, following a competitively bid privatization process. The existing facility was demolished and a new 100-room, four-star hotel of international standing was built in its place. For the implementation of the project, SMPH established a local company—Compagnie Hôtelière du Golfe S.A.
The prior facility was located along the Atlantic coast in the administrative heart of Cotonou. Despite its prime location, the condition and architectural layout of the prior hotel was not conducive to attracting business travelers and tourists. The newly designed facility caters to the needs of business travelers and vacationing tourists.
The project is expected to support the Government of Benin’s efforts to reform the public sector, rehabilitate state-owned assets, and develop the tourism sector. It is expected to provide much-needed modern hotel facilities, increase the number of visitors and tourists, and contribute to tax revenues and foreign exchange earnings. The project will generate both skilled and unskilled jobs and transfer proven managerial and technical skills to locals.
MIGA’s participation in this project is aligned with its strategic priorities as the issued guarantee supports a project in an IDA-eligible (among the world’s poorest) African country, and a South-South investment. The guarantee was underwritten through the agency’s Small Investment Program.