The International Finance Corporation (IFC), a member of the World Bank Group, has announced a $155 million Sustainability Linked Loan (SLL) to support Orascom Development Egypt (ODE) in reducing greenhouse gas emissions and enhancing energy and water efficiency in its flagship hotels in El Gouna, a Red Sea destination. The financing aims to improve resource efficiency and promote sustainable tourism practices while optimising ODE’s debt profile.
The SLL, verified by Moody’s, comprises $96 million and €55 million tranches and marks the first such loan issued by a tourism and real estate company in Egypt. Funds will be used to implement energy-efficient measures, including heat pumps, solar heaters, and water conservation systems, reducing non-renewable energy consumption by 50% and water usage by 20%. A portion of the loan will refinance existing debt to strengthen ODE’s financial position.
The project is part of a broader IFC initiative to support sustainability in Egypt’s tourism sector, which contributes 8% of GDP and employs 2.5 million people. IFC will also assist ODE in obtaining EDGE certification for its hotels, promoting green building practices and resource efficiency. El Gouna, known for its environmental stewardship, already generates over one-fifth of its power through solar energy and produces one-third of its irrigation water through treatment plants.
Omar El Hamamsy, Group CEO of Orascom Development, highlighted the partnership’s significance: “Our environmental commitment is reflected in our continued proactive measures towards enhancing energy efficiency and water conservation across our destinations, including El Gouna by the Red Sea. This partnership reflects our commitment as a global developer in contributing to a healthier planet, by creating vibrant destinations that harmonise with nature and boost Egypt’s economic growth. At the same time, this funding facility also enables our company to optimise our financing terms by reducing our cost of capital, strengthening our liquidity and maintaining a net debt to adjusted EBITDA ratio of less than 1.3x.”
“Egypt’s tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues. Our partnership with Orascom Development Egypt is a testament to our shared commitment to supporting a strong and more sustainable tourism sector in Egypt,” said Sérgio Pimenta, IFC’s Vice President for Africa.
