The FINANCIAL — IFC, a member of the World Bank Group, will invest $3.5 million in Bhutan’s Zhiwa Ling Hotel to support its plans to refurbish and increase room capacity and boost tourism in the country. This is the first ever external borrowing by a private Bhutanese company.
IFC’s investment will provide long-term financing to Zhiwa Ling’s hotel in Paro – a growing city, and home to the country’s only international airport. The increased room capacity will cater to the growing numbers of visitors to Bhutan.
“This investment, the first external commercial private loan in Bhutan, will help increase our room capacity and upgrade our facilities,” said Karma Lotey, CEO of Zhiwa Ling Hotel. “Over the next two years, we aim to build additional rooms and upgrade our facilities to help us fill the gap for conference and event facilities in Paro.”
In addition, Zhiwa Ling will adopt global best practices in life and fire safety, establishing a benchmark for the local industry, according to IFC.
The tourism industry is a key economic sector for Bhutan. It creates employment, and is a major contributor to foreign exchange earnings and tax revenues. It also generates economic activity for small and medium-sized businesses, which supply goods and services during construction and operations.
“IFC’s investment will boost Bhutan’s tourism infrastructure and grow linkages with local suppliers, and create increased business opportunities along the hotel’s value chain,” said Vivek Pathak, IFC Director for Asia-Pacific. “It will build confidence among other potential foreign investors looking at Bhutan.”
IFC invests in hotels and tourism because of its strong development impact, particularly for emerging economies. Since 1956, IFC has invested over $2.8 billion in over 260 projects in 89 countries with more than half of these investments in frontier countries.