BEIRUT: The Lebanese government signed Wednesday a $200 million World Bank loan to finance a $370 million project aiming to supply Beirut with water from the Awali River.

The step had been delayed from December 2010, when the World Bank board of directors approved the loan for the project, which the bank calls the Greater Beirut Water Supply Project.

The government was due to sign the agreement months ago after the Cabinet finally approved it last October.

“The project will provide 40 million cubic meters from the Awali River and will provide areas in Beirut lying bellow 300 meters all the way from Khalde to Nahr al-Mot. We are talking about providing [better access to] water for up to 1.6 million people,” Energy and Water Minister Gebran Bassil said during the signing ceremony in Beirut.

Lebanon representative of the World Bank Hadi al-Arabi sounded optimistic about the prospects of the project. He said it would vitalize the country’s economy, in need of some 10,000 jobs expected to be created by the project, within the next 3 to 4 years.

“I call on the Lebanese Parliament to quickly ratify [the decree authorizing the government to take the loan] to allow the World Bank to start financing the project and launch its implementation,” Arabi added.

Bassil said the project would rehabilitate the capital’s current water infrastructure all the way from “the source to the households.”

“The project consists of two main segments. The first will transport water through a canal from the Awali River to Khalde. The second includes building distribution networks and water tanks,” he said, adding: “16 medium water tanks, two big water reservoirs and 200 km of water networks will be built.”

But Bassil highlighted that the project would fall short of catering for the capital’s full demand for water unless it was coupled with the construction of more dams.

“We hope the project is completed soon but this alone is not sufficient to cover all the water needs of the city. It is fundamental that this step would be followed by the completion of the Bassari dam which can provide up to 130 million cubic meters of water,” Bassil said adding “otherwise we would have invested in infrastructure that we will not utilize.”

The World Bank said earlier deliberations toward realizing the project had started 15 years ago, but had faced numerous obstacles.

According to the World Bank, the project is designed to strengthen the capacity of the Beirut and Mount Lebanon Water Establishment, which is the utility responsible for the operation of the urban water supply in the project area.