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$1B of World Bank funding in danger: Official

Prime Minister Saad Hariri receives a delegation from the World Bank including its regional vice president, Ferid Belhaj, June 28, 2019. (The Daily Star / Dalati Nohra)

BEIRUT: One billion dollars of the World Bank’s pledged funding to Lebanon is in danger if promised projects are not carried out soon, a senior World Bank official said Friday during a meeting with Prime Minister Saad Hariri.

“We have more than $2.4 billion present in Lebanon’s portfolio today, of which approximately $1 billion is not in a good position,” said Ferid Belhaj, the World Bank's regional vice president, according to a statement from Hariri’s office.

Belhaj called on the Lebanese government to work harder on these projects, without going into details.

“In general, our impression is positive and optimistic, but at the same time our optimism is cautious because of the region’s economic situation, which is delicate,” Belhaj stated.

The World Bank pledged a total of $4 billion in soft loans to Lebanon at last year’s CEDRE conference in Paris. While roughly $2.4 billion has already been allocated to government-proposed projects, the future of the remaining funding is still under discussion, according to sources familiar with the talks between the World Bank and Lebanese officials.

There are three reasons for the World Bank’s concern over the $1 billion worth of projects to which Belhaj referred, the sources said.

First, there are a number of projects that have been ratified by Parliament but whose implementation has been progressing slowly, preventing the World Bank from disbursing the funding.

The second cause for concern are the projects that have been approved by Cabinet but not yet ratified by Parliament. These include a project worth $43 million to modernize Lebanon’s land administration and an additional $95 million in financing for the Greater Beirut Water Supply Project.

Third, there are projects “in the pipeline” that have not yet been discussed by Cabinet, including a jobs creation program valued at $400 million that was approved by the World Bank’s board in June 2018, the sources said.

If the money is not used within a set timeframe – which varies between projects – the amount will be allocated to projects in other countries, the sources warned. It can take up to two years for a project to be implemented from the time the government submits a project request.

Meanwhile, the government is paying “commitment fees” worth roughly 1 percent of the project’s value, the sources said.

 

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