The loan made by IDC is part of the US$75.5 million financing package for the construction of the new hotel. IDC is also contributing another US$20.75 million loan, which benefits from a guarantee issued by the East and Central Africa (ECA) hub of IDC, it said.
The sponsors of the AYA Group will contribute the remaining US$34 million.
Work on the multi-million dollar hotel project was suspended in April with media reports saying an unnamed construction firm pulled out. Also, the project was reportedly awaiting a new management team from Germany to take over.
At the time work was suspended on the proposed 22-floor hotel, the eastern and western wings had reached the second floor.
The hotel development is expected to cause positive economic benefits to Uganda, such as creation of jobs, skills in hotel management, as well as contribute to substantial foreign exchange earnings for the country.
Uganda, which is due to host the Commonwealth Heads of Government Meeting (CHOGM) this month, has a shortage of hotel facilities.
The government has designated tourism as a priority sector and investment inflows into the country have also resulted in an increased demand for first class accommodation.
"We are pleased to be able to provide the required insurance capacity to support IDC loan that will allow this important project to proceed," said Mr. Peter M. Jones, ATI's chief executive.
"Uganda is one of the founding members of ATI, and we are very happy to support the investments there," he added.
ATI is a political and commercial risk insurer, established under the United Nations (UN) charter, with over $134 million in underwriting capital.
Source: East African Business Week
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