by Mia Taylor
Last updated: 3:51 PM ET, Mon July 23, 2018
Katara Hospitality and AccorHotels are partnering to create a $1 billion investment fund focused on hospitality projects in sub-Saharan African countries.
The money will be used to target greenfield projects, brownfield projects and conversions of existing hotel properties through acquisition, according to a statement issued by AccorHotels.
The new fund will begin with $350 million contributed by Katara and $150 million from AccorHotels, Europe's biggest hotels group. Additional financing is expected to come through leveraging and co-investments.
About 40 properties ranging from economy to luxury and totaling 9,000 rooms are expected to be developed with the money.
The two companies said their goal is to create the number one sustainable hospitality fund dedicated to Africa. The projects resulting from the fund would bring jobs, training, a transfer of skills and more to the region, and would be created in compliance with the UN Sustainable Development goals.
"Having been present for over 40 years in Africa, we also know that there are increasing and sizeable needs for quality hospitality," said AccorHotels chairman and chief executive Sebastien Bazin.
"Through this fund, we will match the expertise of Katara Hospitality together with AccorHotels' world leading brand portfolio to accelerate our dynamic growth trajectory in the sub-Saharan region," Bazin said.
Accor already operates 114 hotels in Africa including 43 in sub-Sahara Africa across 15 countries. Last year the company announced that it would open three more in Ethiopia by 2021.
According to Reuters, AccorHotels is not the only brand ramping up development in Africa. Hilton Worldwide Holdings Inc and Hyatt Hotels & Resorts are also increasing their focus on the continent, where the International Monetary Fund is projecting notable economic growth. In sub-Saharan Africa alone, there's been economic growth of 3.4 percent this year, up from 2.8 percent in 2017.
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