Lebanon secures increased World Bank loan of $400m
Lebanon has secured an increased World Bank loan for reconstruction work, the Finance Minister Yassine Jaber revealed, Al-Monitor via Reuters reported on April 23rd.
The World Bank has approved an increase in a reconstruction loan from $250 million to $400 million, Al-Monitor via Reuters reported on April 23rd.
Jaber made the announcement after meeting with World Bank Vice President Osama Weden. The increased loan forms part of a $1 billion package introduced by the World Bank in March to support Lebanon’s post-war recovery.
However, to first secure the loans amendments were needed to pre-existing legislation, The Financial Times reported on April 24th. The main hurdle for Lebanese government was the banking secrecy laws, which granted authorities and auditors access to financial records up to ten years old.
Financial reform is a step Lebanon has been reassured it must take to gain financial aid, as the EU recently stated, The New Arab via AFP reported on February 21st.
This legislative move marks a major milestone for the reform-driven government. They aim to restore trust and combat corruption in a country long plagued by economic and political turmoil.
Therefore, the government plans to allocate $250 million to address electricity issues, $256 million to water, $200 million to agriculture, and $200 million to social affairs. The World Bank will issue the funds on concessional terms, with a repayment period of up to 50 years.
While in Washington, Jaber also met with IMF Managing Director, Kristalina Georgieva. During a reception at the Lebanese Embassy, Jaber emphasised the new government’s commitment to overdue economic reforms. US Deputy Special Envoy, Morgan Ortagus, reiterated the urgency for reform, calling it essential to rebuild and stabilise the country.
Nevertheless, Lebanon remains in the grip of a severe economic crisis that began in 2019 after years of financial mismanagement. The World Bank estimated that Lebanon requires $11 billion for the country’s reconstruction, Middle East Eye reported on March 7th.
Moreover, tensions flared up this week after Iran’s ambassador to Lebanon rejected government calls for Hezbollah to disarm which drew criticism, The New Arab and agencies reported on April 24th. The Lebanese foreign ministry summoned the ambassador, Mojtaba Amani.
Al-Monitor via Reuters, Financial Times, The New Arab via AFP, The New Arab and agencies, Middle East Eye
