Lebanon gets $250 million World Bank loan to ease electricity crisis

BEIRUT (AP) — The World Bank will grant Lebanon a $250 million loan that will be used to help ease electricity cuts in the crisis-hit country, the country’s finance ministry said Thursday.

Lebanon has faced major electricity problems for decades, but the situation became worse following an economic meltdown that began in late 2019. The 14-month Israel-Hebzollah war that ended in late November also badly damaged electricity and other infrastructure in parts of Lebanon.

The state-run National News Agency said the deal between Lebanon and the World Bank was signed in Washington by Finance Minister Yassin Jaber and Jean-Christophe Carret, the bank’s regional director.

Lebanese officials including Jaber, Economy Minister Amer Bisat and central bank governorKarim Souaid are in Washington for the Spring Meetings of the World Bank and the International Monetary Fund.

“This loan forms a strong push to steps of reforms that Lebanon is carrying out to fix this sector,” Jaber was cited by the news agency as saying. Most people in Lebanon rely on private generators to produce electricity that is high in cost and causes pollution.

The loan will be used to improve collection of electricity bills as well as improving solar farms that would save $40 million annually, according to the report.

Lebanon’s President Joseph Aoun and Prime Minister Nawaf Salam have vowed to work on implementing reforms and fighting corruption and decades-old mismanagement by the ruling class to get Lebanon out of an economic crisis that the World Bank has described as among world’s worst since the 1850s.

In Beirut, parliament on Thursday approved a law to meet a key demand of the International Monetary Fund to remove the decades-old banking secrecy before the IMF agrees to a bailout program.

The 1956 banking secrecy law, that prevents revealing information about clients and their accounts, attracted lots of foreign deposits into the country in its early years but more recently it was seen as an obstacle to fighting corruption and money laundering in the small nation.

The new law, which was approved in parliament by 87 votes with 13 against, states that there is a 10-year retroactive period, meaning pre-2015 accounts will not be covered by the secrecy provision.

Since Lebanon’s economic slide began in October 2019, three-quarters of the population of 6 million people, including 1 million Syrian refugees, plunged into poverty. The Lebanese pound has lost more than 90% of its value.

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