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Deal signed to establish $2b Arab Tourism Bank

DUBAI — The Arab Tourism Organisation (ATO) and Siraj Capital Ltd, recently signed an agreement in Jeddah for the establishment of The Arab Tourism Bank in the presence of Prince Sultan bin Salman bin Abdulaziz, secretary-general of the Supreme Commission for Tourism in Saudi Arabia and under the patronage of the president of the 10th council for the Arab ministers of tourism Engineer Joseph Sarkis, Lebanons minister of tourism.

The agreement followed a resolution taken by the Arab ministers of tourism during their 8th council meeting, mandating the Arab Tourism Organisation to undertake necessary steps to establish the Arab Tourism Bank.

The Arab Tourism Organisation and Siraj Capital aim to establish the Arab Tourism Bank as a tourism investment bank to be capitalised at $2 billion, serving all Arab countries. The firms plan to invest directly in some Arab countries by structuring and managing investment funds. They would target other investment funds in the region focusing on the tourism sector as well.

The Arab Tourism Organisation in partnership with Siraj Capital will undertake the required feasibility studies, financial and regulatory structuring work and the preparation of a private placement memorandum for the bank's initial paid up capital.

Dr Ghassan Al Sulaiman, chairman of Siraj Capital, said: "Siraj will lead this initiative in partnership with Osus Company to identify the most appropriate model for the operation of the bank based on similar international existing models and to locate the strategic partners."

The council of Arab ministers of tourism recently stressed the importance of supporting the tourism sector in the Arab world and the establishment of a strategy that caters to this industry, and its financial requirements.

According to Bandar Fahed Al Fehaid, president of the Arab Tourism Organisation, "the results of recent research and studies have underlined the importance of the establishment of an Arab tourism bank for supporting the development of the tourism sector throughout the Arab countries, where tourism is one of the fastest growing sectors."

For some Arab countries, tourism sector represents a major source of income and a main contributor to GDP. These countries have abundant natural and touristic attractions and hence have a pressing need to attract local and foreign investment and know-how that would help develop these opportunities, he said.