The financing package to BIM Land and its subsidiaries consists of a loan of up to $50 million from IFC’s own account and a trust loan of up to $37.5 million from the multi-investor Managed Co-Lending Portfolio Program (MCPP) managed by IFC. At least $10 million of this financing package will be dedicated to developing tourism in Lao PDR.
The investment in sustainable tourism infrastructure aims at attracting more domestic and international tourists for both countries, and subsequently creating jobs and bolstering these economies.
“As part of this project, BIM Land will add a significant number of international quality hotel rooms or serviced apartments, more than 1,500, in Vientiane, Ha Long Bay, and Phu Quoc Island. Moreover, the project scale and scope in Phu Quoc Island is expected to set new environmental and social standards in the property sector, attracting a new category of domestic and international tourists,” said Doan Quoc Huy, CEO at BIM Land.
The project is expected to create approximately 1,400 jobs, in which 60 per cent are for women. Apart from local hiring and a relatively higher wage, the project will source around 90 per cent of its goods and services locally. IFC will also share best practices to help the company enhance its performance.
“The tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues for developing countries,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Lao PDR. “In alignment with government’s efforts, IFC’s loan to BIM Land will help create higher skilled job opportunities for the local workforce in Lao PDR and Vietnam, thereby strengthening supply chains, driving inclusive growth and enabling private sector participation.”
Tourism is one of the key growth drivers for both countries. In 2018, Vietnam recorded 15.5 million foreign visitors and Lao PDR attracted approximately 4.2 million international arrivals. However, when compared with Thailand, which receives 38 million visitors annually, both Vietnam and Lao PDR have significant potential for further growth.
In Vietnam, the underdevelopment of emerging tourist destinations like Phu Quoc Island and Ha Long Bay can hinder the nation’s growing tourism. Against this backdrop, IFC’s long-term funding will be critical to enhance the quality of tourism infrastructure in both the countries, attracting repeat visits and encouraging tourists to stay longer.
Meanwhile, one of Lao PDR’s significant challenges is the lack of quality accommodation facilities in Vientiane, the capital and gateway for most international tourists.
In pursuit of a green and sustainable tourism business, BIM Land has committed to applying IFC’s Excellence in Design for Greater Efficiencies Green Building Certification System (EDGE) in its new hotels to be developed under this project with the aim of reducing energy, water, and material consumption by at least 20 per cent compared with similar buildings.