Apapa Hotels Limited

proposed

This summary covers a non-shareholder loan from the Industrial Development Corporation (IDC) of South Africa Limited to Apapa Hotels Limited in Nigeria. The lender has applied for a MIGA guarantee of $12.2 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 construction and operation of a four-star business hotel in the Apapa suburb of Lagos in Nigeria. The hotel will comprise 103 rooms, a restaurant, as well as business and leisure facilities. It will be operated by the Rezidor Hotels ApS Danmark hotel management group under the Park Inn by Radisson brand, under a 10-year management and operation agreement. The project is nearly 75 percent complete, and has been financed so far through equity contributions and a shareholder loan from the sponsors. IDC's non-shareholder loan to Apapa Hotels Limited, for which MIGA's guarantee is being requested, will be used to finance the remaining building works, fittings, furniture, and equipment. Environmental Categorization The project is a category B under MIGA's Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary. Development Impact The main development impact is the project's contribution to economic growth outside of the oil sector, a key objective of the World Bank's Country Partnership Strategy for Nigeria. It should also support the identified priority of the Lagos state government to use tourism and leisure to better harness the city's potential. There is an unmet demand for a business hotel of international standing in Apapa, where a number of multinational corporations and government agencies are located. During construction, the hotel is expected to import approximately $2.5 million in fittings, furniture, and equipment from South Africa, therefore promoting intra-regional trade. During construction and operation, it will increase procurement for local goods. Upon completion, the project is expected to create 80 jobs for local employees. The project is aligned with MIGA's commitment to supporting investments in countries eligible for concessional lending from the International Development Association as well as supporting South-South investments.

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