Transforming Hospitality in Africa
By Subhash Ghimire
Highlights
MIGA’s $225 million in guarantees enabled $450 million in foreign direct investment in Sub-Saharan Africa’s hospitality sector.
$205 million was deployed in IDA countries, including Cameroon, Côte d’Ivoire, Kenya, Nigeria, Rwanda, and Senegal.
The project is setting a new standard in the hospitality sector across the region and paving the way for international financing.
Can the World Bank Group execute a multi-country project involving complex guarantees in a short time? The Multilateral Investment Guarantee Agency (MIGA), which houses the World Bank Group guarantee platform, has a story to tell.
MIGA signed a master contract of guarantees in 2021 with Mauritius-based Kasada Hospitality Fund L.P. — a private equity fund dedicated to the hospitality sector — to redevelop and construct hotels in the Sub-Saharan Africa region. The guarantees provided coverage against the risks of transfer restriction, expropriation, and war and civil disturbance for up to 15 years. The projects under the master contract, involving seven countries, 14 contracts of guarantee, and 17 hotel projects with ~2,900 hotel rooms, were completed in just three years.
The projects’ macro and micro economic impacts in Cameroon, Côte d’Ivoire, Kenya, Namibia, Nigeria, Rwanda, and Senegal showcase MIGA’s ability to leverage a programmatic approach for equity investments in low-income countries, and Kasada’s capacity to negotiate a complex risk-management framework protecting its investments in the region. Together, this partnership helped deliver impact at scale in a region where investments are needed the most.
The first eight hotel projects in Côte d’Ivoire, Cameroon, and Senegal closed in fiscal years 2021 and 2022, and the remaining projects were signed in fiscal years 2023 and 2024. The project presented unique challenges and required cross-unit collaboration, extensive due diligence, and continuous client engagement to finalize the guarantee contract.
As one of the largest employers in Africa and a significant source of revenue for national economies, the hospitality sector is key to Africa’s successful development. Relationship manager for the Kasada project Noureddin Ennaboulssi, Senior Underwriter at MIGA, commends the company’s highly professional team. “Their expertise and dedication in supporting impactful projects in the hospitality sector was truly inspiring,” added Ennaboulssi.
Raising sustainability standards in Africa’s hospitality sector
MIGA’s guarantee in Côte d’Ivoire supports Kasada’s equity investment in the greenfield development and operation of a 170-room, dual-branded hotel complex in Abidjan. The project is helping to establish a business and hospitality hub while raising sustainability standards in an area dominated by unbranded hotels. The hotel is seeking IFC EDGE green building certification upon opening.
The Kasada project supported greenfield developments in Côte d’Ivoire, and Rwanda, while existing hotels in the region were refurbished or expanded into high-quality, EDGE-certified green buildings. Some of the hotels have up to 90% of their funding tagged as climate finance. Currently, 50% of Kasada’s portfolio has obtained EDGE Green Building certification, and its entire portfolio is expected to be EDGE green building certified in the first half of 2025, resulting in over 40% savings in utilities and energy consumption for greenfield projects.
Similarly, MIGA’s guarantee in Nigeria facilitates the acquisition, refurbishment, and operation of the 181-room Movenpick Ikoyi Hotel in Lagos, as well as the construction and operation of conference, event, and co-working facilities.
Kasada's investment in Nigeria comes at a time of significant economic challenges, marked by high poverty levels and rising inflation. The project is expected to improve the outlook for foreign investment in the country. “Since we acquired the hotel, Lagos’ hospitality sector has shown remarkable resilience, becoming one of Africa’s fastest-recovering markets post-COVID. Kasada was carefully selected by the former owners and stakeholders to acquire the hotel due to our specialized sector expertise, cross-border capabilities, and ability to invest in and enhance the hotel’s rich legacy,” said Olivier Granet, Managing Partner & Co-CEO of Kasada.
“MIGA provided Kasada with extensive guarantee coverage at competitive pricing across our target markets and geographies across key locations in Sub-Saharan African, which helped us to execute with increased certainty each of our investment transactions,” said David Damiba, Managing Partner & Co-CEO of Kasada. “Kasada and MIGA are both focused on generating and creating sustainable economic growth in the region and setting the standards for strong ESG practices in the region through rigorous sustainability standards.”
Kasada is committed to creating and supporting local employment, providing training and career development opportunities in Lagos.
MIGA guarantees are helping attract international financing
The tourism and hospitality sector are a key driver of the region’s economic growth, a major source of foreign reserves and jobs, and the sector is expected to add $168 billion, and create over 18 million jobs by 2033.
Businesses in Africa struggle to attract international financing due to the perceived risks. MIGA’s guarantees helped bring in much-needed capital to protect and create new jobs. Because of Kasada’s investments in the region, about 1,860 jobs will be retained and created.
MIGA’s $225 million in guarantees enabled $450 million in foreign direct investments in Sub-Saharan Africa’s hospitality sector. About $205 million was deployed in IDA countries, including Côte d’Ivoire, Senegal, Kenya, Nigeria, Rwanda, and Cameroon.
Kasada is setting international hospitality environment social and governance standards across Africa by constructing resource-efficient buildings, enhancing job quality through benefits and employee training, delivering top-tier guest experiences, addressing gender inequality, and reducing energy, water, and resources consumption.
“This project was a culmination of our hard work, dedication, and our ability to provide solutions to fit the local needs,” said Muhamet Bamba Fall, MIGA’s Director for Industries. “The success of the Kasada projects showcases the leveraging power of MIGA guarantees in attracting international financing to invest in Africa.”
Kasada has agreed on Gender Action Plans (GAP) in Côte d’Ivoire and Rwanda to address these gender inequalities in the hospitality sector, with a focus on increasing the number of women in leadership roles. The company has set a target of achieving 50% female representation at the managerial level in the project enterprises and will implement a training and program to advance women within the management pipeline.
Collaboration across the World Bank Group
The project is a great example of MIGA’s emphasis on catalyzing and mobilizing private investment to help achieve the World Bank Group’s goal of eradicating poverty on a livable planet, especially in fragile and conflict affected situations, like Nigeria.
The MIGA project team collaborated closely with IFC to underwrite the seven Kasada projects, and where possible, conducting due diligence processes concurrently. MIGA also leveraged IFC’s environmental and social supervision to avoid duplication, reduce the burden on the client, and reinforce the One World Bank Group approach. The MIGA team provided Kasada with a comprehensive macroeconomic, commercial, and legal review of the projects, and assisted in establishing an ESG framework.
“IFC and MIGA were critical to the development of Kasada, a leading hospitality platform in Africa, providing a mix of long-term debt funding and political risk guarantees,” said Ifeoma Ezeokafor, IFC’s Regional Industry Manager, MAS Africa. “In the One World Bank Group spirit, we are pleased that MIGA could leverage IFC’s Environmental and Social work with Kasada, which was critical to engage with this strategic client in the challenging hospitality industry,” she added.