World Bank Gives Lebanon $70M for Reconstruction

The World Bank announced its decision on Wednesday during the joint World Bank and International Monetary Fund Annual Meetings in Singapore to award a grant of US$70 million for a trust fund for Lebanon to support the government's reconstruction efforts in the aftermath of the conflict between Israel and Hezbollah.

The impact of the hostilities on the Lebanese economy has been severe and deserves the attention and support of the international community, said Juan Jose Daboub, Managing Director of the World Bank.

Since the cessation of hostilities, the Bank has been looking at ways in which it can support the Government of Lebanon, without adding to its public debt burden, said Daboub.

Lebanon is one of the most indebted countries in the world, with public debt in excess of 180 percent of GDP. The country cannot afford additional borrowing for reconstruction, and we are trying to help prevent that, despite the dramatic increase in expenditure and a decrease in revenue due to the hostilities.

The trust Fund is one of the latest in a series of steps undertaken by the Bank in support of Lebanon.

Immediately, after the war ended, the Bank approved 100 percent financing of all its projects in Lebanon, exempting the Government from the average 25 percent co-financing commitments for each of the six projects currently under implementation.

Earlier this month, donor countries meeting at a conference in Stockholm pledged more than $900 million for rebuilding. Although the grant drawn by the World Bank may seem small compared with the latter amount, it is rare to see the Bank fund middle-income countries reported Reuters.

Also this month, a group of Arab investors led by Saudi billionaire Sheikh Saleh Kamel launched a campaign to raise $2 billion for reconstruction.