The European Bank for Reconstruction and Development (EBRD) is providing finance for the redevelopment of the historic Leipzig hotel in the heart of Kiev in a move that will help meet strong demand for international standard business and tourist accommodation in the Ukrainian capital.
The EBRD is providing a US$ 30 million loan to Grand Plaza, a special purpose company incorporated in Ukraine, part of the Istil Group. It will be transforming the site of the Leipzig into a quality hotel to be managed by the leading international chain, Marriott Renaissance.
The project is very important for Kiev, where quality hotel supply remains well below that of neighbours such as Poland and many other European countries. By bringing the international chain to Kiev, the investment is also expected to raise standards generally in the Ukrainian hotel and tourism sector.
The Leipzig hotel was originally constructed in 1900. It was a leading tourism and cultural landmark in the Ukrainian capital for almost a century before becoming derelict in the early 1990s.
Upon completion of the reconstruction of the Leipzig, Marriott will operate a 173-room hotel with two restaurants, a spa and fitness facility. Marriott Renaissance will become only the fourth international hotel chain present in the Ukrainian capital and only the second one to operate a four-star hotel.
This will be the first Marriott Hotel in Ukraine and the first joint project of the EBRD and Marriott International. It is expected that the Bank will support Marriott’s expansion into Ukraine and Russia through several similar projects in the future.
The EBRD is the largest financial investor in Ukraine. As of 31 December 2011, the Bank had committed over €7.5 billion (US$ 9.6 billion) through 294 projects.