IFC, a member of the World Bank Group, is investing $27 million in Melwa Hotels and Resorts Private Limited towards the development of 3 hotels across Sri Lanka. The investment will increase Sri Lanka’s capacity in the tourism sector, create jobs, and generate more foreign exchange. The hotels will be operated by Hilton Hotels.
The investment will help Melwa Hotels develop three new hotels outside of Colombo, in Yala, Kosgoda, and Negombo. A subsidiary of Melwire Rolling Private Limited, the company is a new entrant to Sri Lanka’s tourism sector.
“In addition to the funding, Melwa will also benefit from IFC’s expertise and advice as we diversify in to tourism,” said P. P Muruganandhan, Managing Director of Melwa. “The access to global experts and sectoral knowledge and best practices will be key to ensure that we build hotels that are profitable, sustainable and contribute to the local economies where they are located.”
The tourism industry is a key pillar of growth for Sri Lanka’s economy. However, much of the country’s tourism potential remains under-developed, while other parts are growing in an unsustainable way. This project fits well with the Government of Sri Lanka’s goal to grow the tourism industry while minimizing potential negative environmental and social impacts.
“Investments in tourism lead to job creation, generation of revenues and foreign exchange and strengthens local suppliers,” said Amena Arif, IFC Country Manager for Sri Lanka and Maldives. “IFC will also provide advice to Melwa Hotels on how to manage environmental and biodiversity matters to minimize their environmental footprint.”
The tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues for emerging economies. Hotels and tourism generate economic activity for small- and medium-sized businesses which supply goods and services both during construction and operations. IFC invests in hotels and tourism because of its strong development impact along the value chain, for employees, and the economy.
Sri Lanka is a priority country for IFC. IFC’s committed portfolio in Sri Lanka covers projects across a range of sectors, including infrastructure, tourism, renewable energy, finance, and healthcare. IFC also provides advisory services to promote sustainable growth among small and medium enterprises by facilitating access to finance and by offering capacity-building and training opportunities.