Besides its own investment, IFC has mobilized another $3 million from FMO, a Netherlands-based development bank, for the hotel project. The loan agreement was signed on Thursday.

The 110-room Fairfield Kathmandu will be operated by international chain Marriott under its Fairfield brand. The total investment of the project is $12 million. These investments will help build the skills of those employed in the sector and contribute to the development of local supply chains, IFC said.

It added that investment would increase Nepal’s capacity in the mid-market hotel segment, create jobs, and promote energy-efficient hotel design.

IFC will also help NHHL adopt a green building design and construction principles to implement energy and water-efficient measures.

Gaurav Agrawal, managing director of NHHL, said that the loan deal reaffirms that the Nepali private sector, IFC and FMO are committed towards economic prosperity in Nepal. “The green building design will serve as a model for replication across the industry.”

Initially, the hotel had been planned to be built with four-star facilities. However, there was inadequate space to fulfil the government’s infrastructure requirement, and they settled on building a three-star hotel. “Even then, the hotel will provide services comparable to a five-star hotel.”  

Agrawal said that the Fairfield Kathmandu would come into commercial operation by early 2016. All structural works and 20 percent of the finishing works have been completed, he said. “The remaining finishing works will be done by hiring international designers.”

“IFC remains committed to supporting Nepal as it rebuilds its tourism industry following the devastating earthquake in April,” said Kyle F Kelhofer, IFC Country Manager for Bangladesh, Nepal and Bhutan.

“Investments that support vital economic industries like tourism will send a strong signal to international investors that Nepal is poised for growth and is an attractive destination that continues to cater to traveller needs.”

Meanwhile, NHHL is also developing another five-star hotel in Nagpokhari, Naxal. Around 60 percent of the structural works of the 221-room five-star deluxe hotel under the banner of US chain Marriott International has been completed. The $35 million hotel will be the first international standard deluxe hotel in Nepal.

Marriott International is a leading lodging company based in Bethesda, Maryland with more than 3,800 properties in 74 countries and territories. The company operates and franchises hotels and licenses vacation ownership resorts under 18 brands.

“As we see bright prospects in the country’s tourism sector, we have diversified our business and entered the hospitality industry,” said Shashi Kant Agrawal, chairman of the group.