Hilton Podgorica

Location:

Montenegro

Project number:

41881

Business sector:

Property and tourism

Notice type:

Private

Environmental category:

B

Approval date:

15 Feb 2011

Status:

Repaying

PSD disclosed:

03 Nov 2010

Translated version of this PSD: Montenegrin

Project Description

Refurbishment, extension and operation of Hotel Crna Gora (the “Hotel”, or “Project hotel”), an existing hotel of 150 rooms located in a prime central location of Podgorica, Montenegro. After refurbishment, the Project will comprise of the Hotel, with approximately 200 rooms, which will be operated at international hospitality standards under the Hilton brand, a spa centre, congress centre, underground garage and a retail gallery of 5,500 m2 Gross Leasable Area within the Hotel complex. The Project is being built in 2 phases.

Transition Impact

Increased competition in the sector
The project will introduce an international standard hotel chain into the city that currently lacks accommodation in the premium / institutional range of the market.

Market expansion (through backward linkages) and improved business standards
The Project will contribute to a significant upgrading of technical and managerial skills in the economy beyond the Project entity both at the hotel construction and operating stages. Construction companies involved in the Project will be required to deliver an international standard hotel product in full compliance with Hilton’s specifications. Once the hotel is fully operational, the employees will benefit from thorough training in customer service, marketing and hospitality, as well as catering management, to ensure that an international standard of service is achieved.

Demonstration effect: new product and processes
The Project will set a new benchmark in its innovative design and quality. The Project will introduce an international premium hotel chain. It is expected that the demonstration effect of the Project is two-fold and particularly strong since many hotel operators and financial institutions still shy away from the perceived risks and obstacles related to hotel operations in Montenegro. Observing a successful hotel project will lead, on the one hand, other international hotel operators to consider expanding their operations into Montenegro, and on the other hand, it will also encourage commercial banks and equity investors to look at similar projects in the future.

The Client

Crna Gora Hotel d.o.o, a special purpose company to be incorporated in Montenegro (“the Borrower”).

EBRD Finance

A senior loan of up to EUR 23.9 million to the Borrower.

Project Cost

EUR 74.3 million.

Environmental Impact

1. Screening Categories
The project was categorised “B” by European Bank for Reconstruction and Development (EBRD), which means that an environmental and social analysis was required by the Bank, in accordance with the 2008 Environmental and Social Policy and Performance Requirements. The project has some environmental and social impacts which can be readily addressed through mitigation measures and an action plan.

2. Information Received
The client completed an Environmental, Energy Efficiency and Social, and Hotel Human Resources Management Due Diligence Questionnaires. The Bank’s consultant carried out an energy efficiency assessment of the Project. The Bank’s technical consultant also prepared a technical report on the Project. These have been reviewed by environmental and social staff of EBRD.

3. Environmental and Social Issues and Opportunities
The Environmental and Social Due Diligence (ESDD) indicated that the project is not associated with any significant environmental or social issues. The project has been developed in accordance with relevant national law and the refurbishment and expansion work will be carried out in line with the specification set by Hilton. The hotel was built in 1953 and partially refurbished in 1980, and the client confirmed that the project is not subject to any legal or conservation restrictions.The Project involves significant environmental opportunities such as energy efficiency and water saving measures. Given the project's two-stage design (refurbishment/expansion will take place while other parts of the hotel will continue to operate), life and fire safety and public safety issues were identified as potential issues for this project.

4. Summary of Environmental and Social Action Plan (ESAP)
An Environmental and Social Action Plan (ESAP) has been developed to address (1) a grievance mechanisms for the public and construction workers, respectively, (2) occupational health and safety management during the construction, (3) life and fire safety issues during both the construction and operational phases, and (4) environmental, health and safety management during the construction and operational phases.

5. Monitoring
The project will be monitored by the Bank, through the provision of an annual environmental and social reports and periodical site visits, if deemed necessary.

Technical Cooperation

None.

Company Contact

Žarko Burić
AD UTIP Crna Gora
Bulevar Svetog Petra Cetinjskog 2
81 000 Podgorica
Montenegro

Tel: +38220 443 443
Fax: +382 20 634 294

E-mail: bzarko@t-com.me

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Text of the PIP

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