The International Finance Corporation (IFC) has unveiled a comprehensive financing package of up to €35.5 million to Oásis Atlântico, a prominent hotel group in Cabo Verde. This strategic move is aimed at fortifying the country’s vital tourism sector, fostering economic growth, and mitigating the impact of the COVID-19 pandemic on the industry. The funding will provide much-needed liquidity to Oásis Atlântico, supporting its hotels and contributing to job retention and supply chain sustainability.
Key Points:
- IFC’s Financing Package: The financing package, arranged by IFC, includes a €10.5 million loan from IFC’s own account, a concessional €10.5 million loan equivalent in USD from IFC through the Blended Finance Facility, and up to €14.5 million in loans mobilized from four commercial lenders.
- Debt Refinancing and Liquidity Support: Oásis Atlântico will utilize the investment to refinance existing debt, securing longer loan maturities of up to 14 years that are not readily available in the local market. This move aims to improve the financial structure of the hotel group and address liquidity constraints stemming from the pandemic.
- Employment and Supply Chain Impact: The investment is anticipated to support over 700 direct jobs and 20,000 indirect jobs. It will also sustain a reliable source of income for more than 700 SME suppliers and farmers who provide goods and services to Oásis Atlântico’s hotels.
- Economic Resilience and Recovery: Tourism constitutes a significant portion of Cabo Verde’s economy, representing 25% of its GDP and 45% of formal jobs. The IFC’s financing seeks to strengthen the resilience of the country’s tourism industry, which is expected to fully recover by 2025.
- Corporate Governance and Sustainability Measures: In addition to financial support, IFC will collaborate with Oásis Atlântico to enhance its corporate governance and environmental and social performance. This underscores IFC’s commitment to sustainable development and responsible business practices.
IFC’s financing initiative for Oásis Atlântico in Cabo Verde emerges as a crucial step in revitalizing the tourism sector, a key driver of the country’s economy. By addressing liquidity constraints, supporting job retention, and promoting sustainable supply chains, the investment is poised to contribute significantly to Cabo Verde’s economic growth and recovery from the impact of the COVID-19 pandemic. The collaboration underscores IFC’s commitment to fostering sustainable development and economic resilience in Cabo Verde, with a focus on key sectors such as tourism, infrastructure, green energy, health, and access to finance.
