Xcaret, founded in 1990, is a group of companies focused on tourism, hotels and amusement parks on the Riviera Maya (Quintana Roo and Yucatan, Mexico). Xcaret has requested a $300 million loan to double the capacity of the current 900-room Hotel Xcaret Mexico, as well as building additional infrastructure (such as a convention center and an underground tunnel), with construction scheduled to commence in 2023 and new facilities opening sometime in mid to late 2025. IFC will lend up to $100 million and the remaining $200 million from unknown parallel lenders.
Due diligence:
The total project cost is US$425 million, which is expected to be financed with long-term debt of US$300 million and internal cash generation. The proposed IFC investment is an up to US$100 million loan, and the remaining US$200 million will be parallel loans.
The lack of information disclosure and consultation with local communities on this project risks increasing social tensions and resulting in unanticipated environmental impacts. For this reason, we recommend that IFC to respect the access to information and participation as well as to consultation and free, prior and informed consent of local communities and Indigenous Peoples:
1. Reassess whether the project is likely to have impacts on Indigenous Peoples and their heritage, which require management under PS7.
2. Redefine the project’s area of influence to encompass environmental and social impacts, including cumulative impacts, both in and outside Xcaret’s compound, such as on mangrove and other nearby coastal ecosystems.
3. Work with Xcaret to update and publish all relevant information about the project design and implementation in Spanish and English, to include:
