The Republic of Lebanon

Rehabilitation of Private Sector Enterprises Damaged by the Israeli Aggression
Loan No: 505 Interest Rate: 3.0 %
Beneficiary: Banque du Liban Grace Period: 8 years
Project Cost: KD 105.5 million Maturity: 25 years
Amount of Loan: KD 25.0 million Repayment: 35 semi-annual installments
Date of Board Approval: - First Installment: 8 years following the first disbursement
Date of Loan Agreement: 2007-01-15 Date of Loan Effectiveness: -

Objectives:

The project aims at contributing to the process of rebuilding Lebanon and repairing  the direct and indirect damage caused by the Israeli aggression to private sector projects in the summer of 2006. The project is expected to stimulate the domestic economy, and help reduce the unemployment level, which increased due to the shutting down of many private enterprises damaged by the Israeli aggression.

Description:

The project comprises concessionary development loans to the owners of small and medium size private enterprises, in different economic sectors. The purpose of these loans is to help rebuild the damaged enterprises and to establish new ones as substitute. The loans will be made through local banks, under the supervision of the Banque du Liban, and in co-operation and co-ordination with the Economic and Social Fund for Development, Kafalat Company and other related institutions. The Project involves civil works, acquisition and assembly of equipment and machinery, transportation vehicles, communication devices, spare parts, systems and programs, technical assistance and working capital needed for the rehabilitation of the damaged enterprises, either directly or indirectly.  The project also entails technical assistance to the executing agencies and the targeted beneficiaries, including studies, systems, experts and training of employees.  The project, which is expected to be completed by the end of 2009, has two main components:

  1. Production and Service Projects: This includes private sector projects in different economic sectors that were damaged directly or indirectly by the Israeli aggression in the summer of 2006. The project will assist the owners of such projects through granting them concessionary sub-loans, allocated by the Banque du Liban to local banks which will relend them to the targeted beneficiaries. These sub-loans will be used to rebuild the damaged enterprises, through the execution and maintenance of the civil works, acquisition and maintenance of equipment, machinery, transportation vehicles, communication devices, spare parts, systems and programs, technical assistance and working capital.
  2. Technical Assistance: This includes conducting studies, acquiring systems and programs, and providing experts and training for the executing agencies and the targeted beneficiaries.

Financing:

The Arab Fund’s loan covers about 23.7% of the project total cost. The remaining financing is expected to be provided by the Lebanese Government and other sources of financing.