LIBERIA: APPLICATION FOR OPIC FINANCE: KENDEJA HOTEL

UNCLAS MONROVIA 000407

SENSITIVE
SIPDIS

PLEASE PASS OPIC FOR KENNETH ANGELL
DEPARTMENT FOR AF/W


E.O. 12598: N/A
TAGS: EINV EFIN OPIC LI
SUBJECT: LIBERIA: APPLICATION FOR OPIC FINANCE: KENDEJA HOTEL
PROJECT

REF: STATE 49549


1. (U) The following response to reftel is based on information
gleaned during the May 19-23 visit of OPIC officers Kenneth Angell
and Barbara Gibian, on post's interaction with the Kendeja project
prior to that meeting, and on information gleaned from Liberian
officials and others who either support or opposed the project.
During our discussions with supporters and potential opponents of
the project, we found across-the-board support among Liberians.


2. (SBU) The RLJ Kendeja investment got off to a controversial
start, drawing vociferous opposition from traditional leaders and
from Representative Edwin Snowe, former speaker of the House of
Representatives, in whose district Kendeja is located. In a May 20
meeting, Rep. Snowe told us he now thinks the Kendeja hotel project
will benefit the community, and said he looks forward to walking
over to enjoy the amenities once it is completed. He urged the RLJ
companies to consider the long-term relations with the neighboring
community, noting that while the employment offered by the project
is very welcome now, resentment could grow once those jobs end and
the contrast between the resort and the villages becomes more stark.
(Note: The RLJ representatives are aware of this issue and have
told us they plan to employ as many local residents as possible and
are providing training that will make current employees more
marketable. End note.)


3. (SBU) We also spoke with traditional leaders who said that
although the GOL's decision to grant a sacred site to foreign
investors was troubling to many Liberians, people understand that
development is necessary. It was suggested that RLJ could take
steps to incorporate traditional leaders in a ceremony that would
recognize their spiritual concerns and promote greater acceptance of
the project. RLJ reps have since taken steps to consult with
Liberian traditional and cultural leaders.


4. (U) Market developments in hotel and tourism sector: Liberia's
acute shortage of acceptable hotel rooms has spawned a building
spree. A National Investment Commission (NIC) survey revealed
approximately 400 hotel rooms in Monrovia, with under 200 of those
at the one- or two-star level (and the rest below that). None of
the hotels are or will be of the quality of the proposed RLJ hotel
and the better ones operate near capacity. The NIC Chair estimates
a market for approximately 1,000 rooms in Monrovia.


5. (SBU) This investment is a bet on Liberia's future, and will do
much to secure that future. The scale of the investment and the
attitude of the investors send a message to Liberians that their
country is returning to normal and to investors that there are
opportunities in Liberia. The project should also support growth of
much needed services (such as transportation, trash collection, and
hospitality services). Several of these services are offered by
clients of the OPIC-funded Liberian Enterprise Development Finance
Corporation (LEDFC),providing synergy.


6. (U) Participants that would cause the embassy not to support the
project: None. Post has been impressed with the foresight,
sensitivity and diligence shown by participants in the project, from
the contractors (who consulted with Econoffs in January) to the
security officers (who met with posts' security counterparts this
week). We are not aware of ties to terrorism, money laundering,
corruption, or violations of law. The project participants seem to
be placing a high priority on social and environmental
considerations.

BOOTH