Project Description
Provision of up to USD 12 million senior secured loan to Al Dau al Haram for Hotels Operations (the "Borrower" or the "Company"), to finance the development and operation of a new hotel under the Hyatt Regency brand in West Cairo, Egypt (the "Project").
Project Objectives
Supporting sustainable developments in the tourism sector in Egypt, which has been particularly affected by the Covid-19 outbreak. The Loan will be used to finance the construction, equipment and operation of a new 249-room hotel to be operated under the Hyatt Regency brand.
Transition Impact
ETI score: 73
- Inclusive: The Project will support improved access to training and work-based learning opportunities for young women and men. It will support the introduction of an accredited training programme, targeting a large number of young women and men, in close cooperation with local stakeholders, Egypt's Ministry of Education and Technical Education and TVET Egypt.
- Green: The Project entails the implementation of a comprehensive set of sustainability measures related to energy and resource efficiency (GET share 24%).
Client Information
ALDAU ALHARAM FOR HOTELS OPERATIONS SAE
Al Dau Al Haram for Hotels Operations SAE is a company incorporated in Egypt for the purpose of developing and operating the Project. The Company is part of the Aldau Development group of companies and is ultimately owned by the Sami Saad family.
EBRD Finance Summary
USD 12,000,000.00
Total Project Cost
USD 29,200,000.00
Additionality
-
Financing Structure: The Bank is providing a long-term loan with a tenor above the market average with an adequate structure to respond to the Covid-19 impact on the hospitality sector in Egypt.
- Standard-setting: The EBRD is sharing its expertise on (1) higher inclusion and gender standards and/or equal opportunities action plans. (2) Energy and resource efficiency and climate resilience financing via the provision of technical assistance on resource efficiency.
Environmental and Social Summary
Categorised B (2014ESP). The Project is currently in the final stage of refurbishment and is located in an existing business park and therefore not associated with either resettlement, economic displacement or cultural heritage issues. ESDD has been carried out by ESD staff and included a site visit to the Project and discussion with the Company management (January 2020), reviews of the completed ESDD Questionnaire and relevant documentation. ESDD showed that the Company is in compliance with national environmental & social law, has a corporate environmental sustainability policy and environmental staff handbook in place and has an HR policy including a grievance mechanism in line with PR2. Life & fire and other physical safety aspects of the Project's building are required to be audited by a third party in accordance with Hyatt's corporate standards for the franchise purpose. To ensure the Project's compliance with EBRD PR, the ESAP, agreed by the client includes OHS actions. The Company is required to ensure that the Project complies with the PRs as well as submit an annual environmental & social report to the Bank.
ESDD showed specifically the following: the use of single use plastics for bags, water bottles and key pads will be phased out (shops in the group's hotels in Hurghada no longer provide plastic bags); they will use eco-labelled cleaning materials; they will install toiletries in fitted refill containers; and, they will introduce an incentive system for guests to reuse towels (if use less, free drinks will be provided).
The Client confirmed that there are no foreign construction workers, under-age workers or on-site accommodation. The construction is expected to be completed in October 2020. The highest number of construction workers onsite is 140, and there is no onsite construction accommodation camp. The hotel will be equipped with fire prevention and fire-fighting provisions in compliance with Hyatt's life & fire safety requirements and Egyptian fire codes. Both requirements are in line with NFPA. The building will be equipped with sprinklers. The hotel cannot be opened for business prior to Hyatt's audit and sign off. Upon the start of operation, Hyatt will apply its Covid-19 response plan for its operation in line with World Health Organization ("WHO") & Centres for Disease Control and Prevention ("CDC") recommendations.
The Project hotel building is being developed by connecting two existing office buildings and consists of only four floors. Therefore the extent of the construction work is relatively limited. There have been no reported material accidents associated with construction workers to date. The client asserted that their construction contract includes clauses for the contractors' legal compliance with Egyptian labour and OHS compliance as well as penalties for OHS offenses. There are, however, some shortcomings such as use of PPE and safety signage at the site. The ESAP addresses these items. The Bank will monitor the Project's environmental and social performance by reviewing an annual environmental and social report as well as a site visit if deemed necessary.
Technical Cooperation and Grant Financing
The Company will receive technical assistance under the Bank's Inclusion Technical Assistance Framework to develop and introduce high quality training programmes including new modules of work-based learning for young labour market entrants and management trainings in hospitality. Assistance will also be provided to support gender sensitive and inclusive recruitment.
The Company will also receive technical assistance under the Green Economy Transition Project Preparation and Implementation framework in order to assess the feasibility of various sustainability measures including green roofs, waste heat recovery, solar energy generation and LEED green building certification. The most innovative technologies implemented as part of the project will be supported by the Finance and Technology Transfer Centre for Climate Change programme (FINTECC).
Company Contact Information
Taco van Heusden, Chief Investment Officer
tvanheusden@aldaudevelopment.com
+44 7748 140 279
www.aldaudevelopment.com
Pyramids Heights Business Park, Building C9
Km 22, Cairo -
Alexandria Desert Road
Giza
Egypt
Implementation summary
PSD last updated
04 Aug 2020
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
Business opportunities
For business opportunities or procurement, contact the client company.
For business opportunities with EBRD (not related to procurement) contact:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com
For state-sector projects, visit EBRD Procurement:
Tel: +44 20 7338 6794
Email: procurement@ebrd.com
General enquiries
Specific enquiries can be made using the EBRD Enquiries form.
Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.
