“The total investment potential is 1.1 billion euro which will be deployed over a period longer than the project's 12-year timeframe with the minimum investment obligation set at 150 million euro,” Montenegrin Tourism Minister Predrag Nenezic said in an audio file posted on the government website following the signing of the deal in Podgorica on Friday.
The government official said Orascom had already made a 10 million euro transfer with the signing of the contract.
Orascom Development will build the resort on an area of almost 7.0 million square metres on which it is granted a 99-year lease. The Lustica peninsula is located at the entrance of the Kotor Bay.
The project is planned to offer 2,350 residential units, several hotels, a town centre, a marina on the Adriatic Sea, an 18-hole golf course, commercial facilities as well as basic infrastructure requirements, Orascom Development said in a press release on its website.
The first phase of the project includes a hotel, town centre, golf course, and the main mooring area. The first phase is expected to be operational within five years, the statement said, giving no investment estimates.
Under the terms of the deal, Orascom Development acquires 90% of Lustica Development, a special purpose vehicle that owns the development rights for the designated resort site. The government will hold the residual equity.
The deal also allows for 30% of the shares in the project to be offered soon to Montenegrin citizens, Nenezic said without elaborating.
He added the resort development will create some 10,000 jobs.
Orascom Development Holding, a developer of fully integrated towns, offering hotels, private villas and apartments, leisure facilities such as golf courses and marinas, has a pipeline of projects under development in Egypt, Jordan, Morocco, Oman, Switzerland and U.A.E, according to the company's website.
The Montenegrin economy is highly dependent on tourism. The World Travel and Tourism Council has projected that the country’s tourism industry will grow at over 8.0% annually in 2008-2015.
