EBRD to finance construction of five Russian hotels

The European Bank for Reconstruction of Development (EBRD) said that it will fund the construction of five mid-market hotels in the Russian cities of Samara, Krasnoyarsk, Kaliningrad and Yaroslavl. The properties, offering a total of 897 rooms, will be developed by Russian Hotel Investment, a limited liability company incorporated in the Netherlands. It is owned by Turkey's Akfen Holding and the principals of Kayi and Insa Groups.

EBRD will provide a EUR 27 mln senior loan and an equity investment of nearly EUR 7 mln to finance the development of the hotels, which are estimated to cost around EUR 98.5 mln. French hotel operator Accor will manage the assets under the Ibis and Novotel brands.

'At present, there are very few international hotel groups operating in Russia, and where so, they are predominantly in the four-five star segments in Moscow and Saint-Petersburg. The project will introduce an economy hotel chain managed by a leading international operator,' the EBRD said in a statement.