$11.8 billion promised at the Paris CEDRE conference
The CEDRE donor conference has resulted in $11.8 billion in pledges of financial assistance, out of which $11 billion are in soft loans. There were 51 countries represented at the conference in addition to international donor institutions.
The various loans are expected to carry a 1.5 percent interest rate over periods ranging from 20 to 30 years.
CEDRE is the acronym for ‘Conférence économique pour le développement par les réformes et avec les entreprises’ (Economic Conference for Development through Reforms and with Businesses).
French President Emmanuel Macron said: “It is up to us to preserve the stability of Lebanon.”
“Starting tomorrow, we will start following up on the pledges made during this conference,” said Macron. “You can count on us,” he said.
Prime Minister Saad Hariri said: “Recovery must start, and the challenge is to reverse the negative trend in economic growth, poverty, and unemployment. The government must play the main role.” He said that CEDRE is not a classic donors’ conference, but is meant to seek an investment plan for infrastructure, set structural reforms, and mobilize the private sector. “The CEDRE conference does not end today, but it is a process that has just begun to modernize our economy, rehabilitate our infrastructure and launch the private sector's potential to achieve sustainable growth and job creation,” said Hariri.
Jean-Yves Le Drian, the French Minister of Foreign Affairs and International Development, said during the conference’s inaugural session: “In international relations, there are no friendships, but proofs of friendships. We have collectively moved to support Lebanon and its institutions in key areas: Security, economy, and the humanitarian aspect.”
The government requested funding for the first two phases of the Capital Investment Program (CIP) that is divided into three phases, each with a four-year schedule. The CIP includes 250 infrastructure projects worth $17 billion.
There are no political or broad conditions on these soft loans, except the government’s commitment to adopt reforms. “Each loan and earmarked project will have to follow its own mechanisms and terms,” said the Minister of Finance Ali Hassan Khalil.
Around 30 percent of the investments will be earmarked for the transportation sector while water and sewage projects will get another 30 percent. Nearly 20 percent will be allocated to the electricity sector with the remaining 20 percent to be invested in other infrastructure and development projects.
The financial aid remains a promise that should be translated into commitments. The government is required to work on each project with the donor country. Grants provided should be approved by the Council of Ministers, and loans should be discussed one by one and enacted in the Parliament.
The World Bank pledged $4 billion as soft loans that will be distributed over the course of five years. It is a record for a single largest financial aid package to the country.
The EU promised €1.5 billion ($1.83 billion) in loans, and €150 million ($183 million in grants to subsidize interest dues on these loans. Christian Danielsson, Director General of EU said: “With the external investment plan we broaden our support to generate up to €1.5 billion of investment until 2020.”
The European Bank for Reconstruction and Development (EBD) pledged €1.1 billion ($1.34 billion) in soft loans to be implemented within six years.
The European Investment Bank (EIB) promised €800 million ($976 million) in soft loans to be distributed over a period of five years.
Saudi Arabia renewed a $1 billion pledge to the country as soft loans, which was previously been put on hold. The Kuwait Fund for Arab Economic Development announced it will provide $500 million in soft loans. Qatar pledged $500 million to be distributed over five years.
France promised €150 million ($183 million) as a grant, and €400 million ($488 million) to be extended as soft loans.
The United States announced that it would provide $115 million as grants to the country. Turkey promised $200 million as soft loans, Italy €120 million ($146.5 million), Netherlands promised $200 million soft loans, and $100 million loans under conditions. Germany pledged $75 million soft loans, and UK $170 soft loans.
The Islamic Development Bank promised $750 million in loans, to be transferred within five years.