JOINT VENTURE ITALKYR CJSC

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The operation will enable Italkyr to refurbish the Hotel Kyrgyzstan, an existing hotel located in the centre of Bishkek, converting it into a four-star international standard hotel. The proceeds of the senior loan will be used to reconstruct the Hotel Kyrgyzstan, providing the country with a vital accommodation facility for international business travellers, and thereby supporting private sector development and foreign investment. The hotel will also support the development of the nascent Kyrgyz tourism sector. The project will support the Kyrgyz Government's privatisation of Hotel Kyrgyzstan, which until now has been owned and operated by the state. The project represents the first limited-recourse financing of a sizeable hotel development in Central Asia not to benefit from any sovereign or export credit guarantees. As such, the project will have a strong demonstration impact, providing a "best practice" model for financing other hotel developments and refurbishments in the region. The project will facilitate technology transfer in the construction industry. In addition, the employees of the hotel will benefit from know-how transfer in customer service, marketing, and hospitality and catering management. Italkyr is a Kyrgyz closed joint-stock special purpose company to be established by Hyatt International Corporation (a privately owned high-quality international hotel operator which, together with Hyatt Hotels Corporation, operates over 190 hotels and resorts worldwide) and C.A.V. Ital, a consortium of 55 Italian companies. The EBRD will provide a senior loan of US$ 8.0 million (ECU 7.3 million) to Italkyr. US$ 19.0 million (ECU 17.4 million). The project involves the provision of a US$ 8 million loan for the refurbishment and operation of the Hotel Kyrgyzstan, located in the centre of Bishkek. The project was screened B/0, requiring an Environmental Analysis of the environmental impact associated with the renovation and subsequent operation of the hotel. The analysis highlighted the following issues: The sponsor will provide the Bank with an Annual Environmental Report documenting, among other things, any environmental issues, such as incidences of non-compliance, and updating the Bank on environmental initiatives taken by the hotel. None