KENYA – MIGA, a member of the World Bank Group, has issued a Master Contract to Kasada Hospitality Fund that will provide guarantees up to US$270 million of the fund’s equity investments aiming to lead the redevelopment and construction of hotels in Sub-Saharan African countries.
The guarantees will provide coverage against the risks of Transfer Restriction, Expropriation, and War and Civil Disturbance for a period of up to 15 years.
This new contract reflects MIGA’s support for the tourism and hospitality sectors in Sub-Saharan Africa, which have faced significant and unprecedented economic challenges as a result of the global COVID-19 pandemic.
MIGA’s support to Kasada, which spans over 10 countries, has already materialized through a sub-project bringing guarantees to eight hotels acquired by the fund in 2021 Cameroon, Côte d’Ivoire and Senegal.
“Travel and tourism are vital for economies across Sub-Saharan Africa, helping support employment, strengthening supply chains and bringing in foreign exchange,” said MIGA’s Executive Vice President Hiroshi Matano.
“MIGA guarantees will support job creation and help hotels meet green building standards, resulting in nearly 20 percent cost savings in energy, water and embodied energy.”
Kasada Hospitality Fund is the maiden fund of the Kasada Group, an investment platform dedicated to hospitality in Sub-Saharan Africa, aiming to catalyze sustainable economic growth and set the standards for ESG practices in the region.
“Our robust and flexible investment platform enables us to make capital injections that finance acquisitions and capex programs which support and help redevelop the Sub-Saharan hospitality industry at this critical time in the cycle,” said David Damiba, Managing Partner and CIO of Kasada Capital Management.
“We are confident in the long term recovery of this sector. Our partnership with MIGA sends a further optimistic signal to the private sector.”
In July last year, Kasada Capital Management (Kasada), the investment platform within Kasada Group dedicated to hospitality investments in Sub-Saharan Africa, announced that IFC will form a partnership with Kasada Hospitality Fund LP by providing senior loan financing to accelerate Kasada’s strategy of building a strong and resilient hotel portfolio across sub-Saharan Africa.
IFC was to extend up to US$160 million of debt funding to Kasada, backing its plan to support the hospitality sector and instill globally recognized ESG practices in its hotels.
The first loan granted by IFC, in collaboration with Proparco as a parallel lender is to finance, on a long term basis, Kasada’s acquisition of eight Accor-managed hotels, run under the Pullman, Novotel and Ibis brands, in Abidjan, Ivory Coast (4 hotels); Dakar, Senegal (3 hotels); and Douala, Cameroon (1 hotel).
Kasada completed this acquisition on December 31, 2020. This initial US$80 million senior loan package provides capital expenditure to refurbish and improve the properties while helping to achieve higher operating efficiencies and meeting ESG goals.
The announcement followed Kasada’s recent signing of the 414-key Safari Hotels and Conference Centre in Windhoek, Namibia, bringing Kasada’s portfolio to a total of ten hotels and over 2,000 keys in four countries.