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Upbeat EIB VP says economic growth potential in Lebanon high, details Bank’s investments in Lebanon

Jul 04

 Upbeat EIB VP says economic growth potential in Lebanon high, details Bank’s investments in Lebanon

Despite Lebanon’s ailing economy, and the increasingly negative overall view of its future, the European Investment Bank Vice President disclosed a rare upbeat outlook as he anticipated an economic growth spurt in the country.

“The International Monetary Fund (IMF) expects that under the current policies in Lebanon, growth is projected to gradually increase towards 3 percent over the medium term,” EIB VP Dario Scannapieco said in an interview with the NNA on the sidelines of the EIB MED 2018 conference in Amman, Jordan.

“The growth potential in Lebanon is high, especially in light of the full commitment and support it receives from the international community,” he added, whilst lauding the Lebanese government’s endeavours facing the repercussions of the Syrian conflict.

On Tuesday, the EU Bank held its 18th edition of the EIB-Med conference “Improving Lives and Creating New Opportunities” during which it disclosed EUR 1.8 billion investments approved for 19 projects in Egypt, Jordan, Lebanon, Morocco and Tunisia under the Economic Resilience Initiative, EUR 130 million grants from EU member states to create jobs and improve education, transport, water and energy, as well as EUR 90 million grants to help get good projects off the ground with vital technical assistance and advisory services.

Touching on the EIB president’s declaration during the CEDRE conference about the bank’s intention to invest EUR 800 million in Lebanon, Scannapieco reiterated the EIB’s commitment to support development plans to build better infrastructure and create jobs for people in Lebanon and other countries in the region.

“We have provided financing of EUR 1.8 billion for 52 projects and operation since 1993, and we participated in the CEDRE conference in April 2018 to reiterate this commitment and our support to Lebanon by offering both: financing and advisory services,” Scannapieco explained, disclosing pledges to provide up to EUR 800 million for financing projects under the Lebanese Capital Investment Plan (CIP).

He noted that the EIB finance would target both key infrastructure (energy, transport, water, sanitation and education) and private sector investments. “We will finance projects that will make a difference in people’s lives.”

However, Scannapieco highlighted the fact that the success of the CIP required a number of reforms in different sectors. “The EU will play its role in supporting the country enhancing its business environment, and the EIB, together with other IFIs, will endeavour to catalyse and crowd-in public and private investors in priority sectors.”

The EIB VP went on to announce the signature of the first project since the CEDRE conference in May, 2018, in support of industrial development in Lebanon -- one of the CIP projects. “Our finance comes under the EIB’s initiative that seeks to step up our finance in Lebanon (and other EU neighbouring countries), the Economic Resilience Initiative (ERI),” he said.

As for the number of projects that the EIB has financed thus far under the ERI in Lebanon, Scannapieco said that the Bank has approved four projects in the transport, industry, as well as the water and wastewater sectors, and SMEs development sectors.

“As an example of ERI projects, we have recently provided EUR 52 million to the construction of three industrial zones in Baalbek, Tourbol-Kosaya and Deir El-Moukhaless - Jleiliye. The industrial zones will host both new industries, as well as companies re-locating from other parts of Lebanon. The EIB loan will finance mixed infrastructure in the industrial zones e.g. water, wastewater, roads, electricity, etc. The project will contribute to increased regional and local development, to boosting the competitiveness and productivity of the Lebanese industrial sector, to creating more jobs, and to attracting foreign direct investment (FDI) and boosting Lebanese exports. This will increase the resilience of the Lebanese economy and hence the Lebanese people,” Scannapieco explained.

“We have also provided more than EUR 330 million to SMEs and Midcaps in Lebanon under Lebanon Private Sector Support Facility; Fransabank (EUR 75m); Byblos (EUR 100m); SGBL (EUR 60m) and FNB (EUR 30m) and a regional credit line to Arab Bank. This will contribute to sustain and generate employment,” he added.

Asked about the way the EIB supported the water and wastewater sector in Lebanon, Scannapieco said that the Bank had provided EUR 68.5 million to the expansion of the Al-Ghadir wastewater preliminary treatment plant. 'The project will improve the poor quality of the coastal water through the provision of improved sanitation services; it will also improve the quality of life for an estimated one million inhabitants and will reduce pollution and environmental stress in Al-Ghadir drainage area and the Mediterranean Sea.”

Moreover, Scannapieco also confirmed the EU Bank’s will to provide technical assistance to the sector to prepare and support the implementation of water projects. “Under the Climate Action Middle East North Africa (CAMENA) that is financed by DFID, the FEMIP Trust Fund has provided a grant of EUR 150,000 to support Lebanese stakeholders involved in the management, implementation, and initial operation of Tyre wastewater treatment plant. The technical assistance provided project management support for the CDR and South Lebanon Water Establishment (SLWE), as well as provided Institutional development support for the SLWE. Also under CAMENA, we provided a grant of EUR 330,000 for the upgrade and expansion of Sidon’s Wastewater Collection and Treatment System,” he explained.

With regard to the EIB’s support to Lebanon’s Energy sector, Scannapieco said that the EIB had provided a EUR 50 million global loan for the Lebanon Energy Efficiency and Renewable Finance Facility (LEEREFF) program.

“To help in the implementation of the program, the Bank has offered EUR 2.4 million to build the capacity of implementing authorities, intermediaries, and potential end beneficiaries for successful implementation,” he said.

The LEEREFF program supports the financing of renewable energy and energy efficiency investments carried out by private companies in Lebanon. The Lebanese Central Bank (Banque du Liban) makes the proceeds of this loan available to selected local banks which make the finance available to companies. The program supports small scale investments by the private sector in the energy efficiency and renewable energy throughout Lebanon. By reducing the consumption of conventional generated electricity and heat, the project contributes to the reduction of greenhouse gas (GHG) emissions and diversification of supply in Lebanon.

“We have a good pipeline of projects, mainly under CIP. This year we hope to sign the Greater Tripoli Basin Wastewater Networks project, the Lebanon Urban Development Framework Loan, and the Lebanon Roads Safety and Employment Programme,” the EIB VP concluded.

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