Kiribati: Otintaai Hotel

The Republic of Kiribati, an island nation located between Hawaii and Fiji in the Pacific Ocean, has long depended on the public sector and foreign aid. Its govern- ment would like to change this by reforming state-owned enterprises, developing
its infrastructure, and laying the foundation for growth in the private sector. As a part of this reform effort, the government turned to IFC to find a private sector part- ner to rehabilitate and operate the state-owned Otintaai Hotel, which had long been a drain on the state budget. As one of Kiribati’s few hotels, the project is critical to expanding the provision of suitable accommodation to visitors.

Royal Crown Enterprises Limited, a local firm, won the tender in Kiribati’s first PPP in the tourism sector. Under the 25-year concession, Royal Crown will renovate and man- age the 40-room hotel, providing accommodations meeting the equivalent of a three- star rating by Australia’s official accommodation accreditation system. It is estimated that $2.25 million in private sector investment will be mobilized in the first two years. The concession was granted in September 2013.