Hotel Construction Guarantee and Refinancing Facility HoCFA

Provides up a guarantee of up to 80% of construction cost

Introduction

The HoCFA facility provides structured financial support to hotel development projects through a two-phase approach—covering both construction and operational readiness. It is designed to reduce risk for financiers while enabling developers to bring hospitality projects to life with greater confidence.

Get in Touch

umbrella-chair-scaled.jpg

Financing Structure

The Facility is structured as a Dual Tranche Facility:

Tranche 1: The Original Facility (OF)

During the construction phase, funding is provided by a bank or construction firm, backed by EDF’s Contingent Guarantee. This guarantee allows developers to access financing more easily, with EDF covering up to 80% of the construction cost, significantly lowering the risk for lenders.

Tranche 2: Refinancing or Relay Facility

Upon successful completion and certification of the hotel by an independent engineer, EDF refinances the original construction loan. This tranche also includes support for working capital and financing for furniture, fittings, and equipment -ensuring the hotel is fully equipped and ready for operations.

Key Requirements

To access EDF services under this product, applicants must meet the following general criteria:

  • Registered Entity: Applicant must be a legally registered business in Malawi.

  • Land Ownership or Availability: Proof of access to land for hotel construction.

  • Feasibility Study Report: A comprehensive feasibility study including market analysis, financial projections, and development timelines.

  • Owner’s Contribution: At least 20% of the total project cost.

  • Collateral: Acceptable forms include land, buildings, guarantees, or other assets.

hotel3.jpg

Eligibility & Application Requirements

Mitigating Construction Risk and Unlocking Finance for Hospitality Investors

hotel.png

Product Features

The constructed Hotel will be under the management of an operator with the following qualities:

  • Holds franchise to, and/or own solid brand names that have been proved in the market;
  • Must have proven track record of at least 3 years in managing/operating hotels/tourism facilities of international standards in a multiplicity of African countries;
  • Must be able to offer Global Reservation Services
  • Owners’ contribution for at least 30% of the total project cost.

Eligible Projects

Tourism projects in the following areas:

  • Cities targeting business and conference tourism;
  • Resorts targeting leisure tourism;
  • Ecotourism

Application Requirements

An application should contain the following:

  • Business Profile;
  • Company registration certification and memorandum and articles of association;
  • Feasibility and Market Study for the Project;
  • Environmental and Social Impact assessment report
  • Business plan covering the financing period
  • Engineering designs and Bills of quantities;
  • Profile of proposed contractors;
  • Profile of the proposed hotel operator; and
  • Title documents for the proposed property on which the project will be developed

GET IN TOUCH

Start your journey with EDF today