One of the world’s richest men and a member of the Saudi royal family has received approval for a $26 million loan from a branch of the World Bank to build a luxury hotel in Ghana, a West African nation with a developing economy but where 40 percent of the people live in poverty.
Prince Al-Waleed bin Talal, also known as Prince Walid, is a nephew of Saudi Arabian King Abdullah bin Abdul-Aziz. With a net worth of $19.6 billion, according to Forbes magazine, he is the 26th richest person in the world.
Yet his company was able to borrow $26 million to build a five-star hotel in Accra, the capital and largest city in Ghana, from the International Finance Corp. (IFC), part of the World Bank Group, under a program to encourage private development in developing nations.
The IFC, whose largest shareholder is the United States, approved the loan in December to KHI Ghana Ltd., a 100 percent-owned subsidiary of Prince Walid’s company, Kingdom Hotel Investments (KHI), for the development of the five-star Movenpick Ambassador Hotel in Accra. The formal loan commitment papers were signed in February, and the IFC is expected to disburse the funds for the nine-year loan soon.
The $103 million hotel with 259 rooms will be along one of Accras major thoroughfares and adjacent to several large commercial developments in the citys central business district. The site was occupied by the Ambassador Hotel, a gift from the United Kingdom to Ghana in recognition of the countrys independence in 1957. The hotel closed in the early 1980s.
The IFC also helped arrange another $20 million for the project from a syndicate of commercial lenders, the agency said.
Desmond Dodd, IFC spokesman in Africa, said the bank is supporting “a project with strong developmental impact in Ghana.”
He said the low-income country needs better infrastructure to attract more investors and create jobs and that KHI Ghana Ltd. approached the IFC for the money at a time when global financial markets were in turmoil and not making loans.
“This project will directly create jobs related to the construction and the eventual operation of the property,” said Mr. Dodd. “The hotel will have large indirect impact as well. The hotel is expected to source almost all of their food and nonfood purchases locally, thereby providing increased business opportunities to a wide range of local suppliers and subcontractors.”
Mr. Dodd said while Africa has not been on the map of global investors for many years, the IFC is helping to change that.
When asked how the IFC justifies a loan to one of the world’s richest men, Mr. Dodd said the agency provides financing to private projects that have large development impact in the host country, and that such private-sector projects require sponsors with the capacity to provide capital and management.
He said Prince Walid and other investors can choose where they put their money and the “IFC’s role is to ensure that investors that want to do business in some of the world’s poorest countries can make investments with high standards.”
Critics question whether a multimillion-dollar loan to a company owned by a billionaire to build a luxury hotel in Ghana would provide much help for poor Ghanaians.
Sen. Patrick J. Leahy, Vermont Democrat and chairman of the Senate Judiciary Committee, has asked the Treasury Department for information from the IFC about the loan. The request was made in his role as chairman of the Senate Appropriations subcommittee on state, foreign operations and related agencies, which has jurisdiction over the IFC and the World Bank.
“The loan, the project and the project participants give rise to obvious questions, and Sen. Leahy is asking for the answers,” said Leahy spokesman David Carle. “He agrees that critics of this project raise some valid points that should be examined further.”View Entire Story
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
Independent voices from the TWT Communities
Entertainment News and Reviews from Washington, D.C. and beyond.
A carefully guided tour through the confusing world of modern bookselling and publishing.
Empowering mind/body/spirit and health dialogue along with cutting-edge, conscious social, political, and world commentary with Adam Omkara. Join the Evolution!
A politically conservative and morally liberal Hebrew alpha male hunts left-wing viper
World's Ugliest Dog Contest
Spelling Bee finale
Marines train Afghan soldiers
Rolling Thunder 2013
Benghazi: The anatomy of a scandal