UNITED Africa Group (UAG) has secured 50 per cent funding from International Finance Corporation (IFC) for the development of the first five-star hotel in Namibia at a cost of N$200 million.

IFC is part of the World Bank Group and it is the second time that the international financier funds a UAG project.

In 1998 IFC also financed Protea Hotel Ondangwa.

On Thursday IFC and UAF group announced the US$10 million loan from IFC to build the five-star hotel in Freedom Square opposite the Kalahari Sands hotel in Windhoek.

Construction on the multimillion dollar 124-room Eliakim Namundjebo Plaza Hotel will start early next year and is scheduled to be completed by 2010.

The luxury eight-storey hotel will comprise suites, up-market retail shops, casino, internet facility, business lounge, travellers' bar, restaurants, conference facilities, wellness centre and a nightclub with panoramic views of the city, according to a media release issued at the signing of the loan agreement last week.

Speaking at the signing ceremony, Minister of Environment and Tourism Netumbo Nandi-Ndaitwah said: "It makes perfect business sense to invest in the hospitality industry and cater for the increased traffic in tourists and business people seeking high quality accommodation."

The hotel will place the country on the tourism map in terms of providing "luxurious African hospitality in a modern setting", Nandi-Ndaitwah said.

Commending IFC for showing confidence in Namibia, Nandi-Ndaitwah said: "The commitment of IFC to facilitate development projects in Namibia must be noted and given due regard.

It is from such smart partnerships that our Namibian companies will develop and grow."

On his part, IFC's Mike Tiller said his group believed in a long-term partnership with clients to help them expand their businesses and become successful.

He congratulated UAG for passing the "stringent" loan conditions of IFC, saying the company has "complied with our aspects of diligence in terms of the corporate governance and track record of financial stability".

This project, he said, will help UAG to "create jobs and opportunities in an important sector of Namibia's economy".

Haddis Tilahun, Executive Director of UAG, called on the City of Windhoek to ensure the "speedy approval of the various conditions necessary to meet the deadlines" for the groundbreaking and the completion of the project.

The new addition to the property stable of UAG comes on the heels of an announcement earlier last week that the group had purchased four properties from Old Mutual.

After the completion of this project, Nandi-Ndaitwah said, the group will have invested over N$400 million in the tourism sector, adding that the hotel project will "generate and stimulate our economy by employing close to 600 people who will benefit directly and many indirectly".

Tilahun said the new development will take the local hospitality industry to the next level.