Lebanon’s finance minister announced that the country has received preliminary approval to raise the value of a World Bank loan for reconstruction from $250 million to $400 million.
What happened: Finance Minister Yassine Jaber, who is leading the Lebanese delegation to the International Monetary Fund and the World Bank spring meetings, made the announcement after meeting with World Bank Vice President Osama Weden.
In early March, the World Bank presented Lebanon with a $1 billion package for the country’s reconstruction, including a $250 million loan, according to a March 12 statement from the office of Lebanon’s prime minister, Nawaf Salam. The latest news marks an expansion of that financial package.
Following a meeting with the senior World Bank official, Jaber announced that the loans “will be granted on a concessional basis, with a repayment period of up to 50 years.” Jaber outlined the distribution of the package: “$250 million agreed upon and signed today, which will be allocated to address the electricity issue, particularly transportation networks; $256 million for water; $200 million for agriculture; and $200 million for social affairs.”
While in Washington, Jaber and his delegation have reportedly also met with IMF Managing Director Kristalina Georgieva. At a reception held at the Lebanese Embassy in Washington on Tuesday, Jaber stressed Lebanon’s new government’s commitment “to a bold and courageous reform program.”
“We are not undertaking these reforms to satisfy the IMF or anyone else. … We are doing them because we need them,” Jaber said.
Deputy US special envoy to the Middle East Morgan Ortagus, who also attended the event, doubled down on the need for reform “We must move forward, and the only way is to strengthen the state, move forward with reform and completely revitalize the country,” she said.
Background: Lebanon has been in a deep economic crisis since 2019, when decades of financial mismanagement and corruption culminated in the collapse of its banking system. The country defaulted on its sovereign debt in 2020, and banks severely restricted access to dollar deposits, locking depositors out of their savings. The Lebanese pound plummeted in value, inflation soared and basic public services began to break down.
The international community, including the IMF and the World Bank, has offered assistance, but most aid remains contingent on the Lebanese government implementing a comprehensive reform agenda. Through the years, political deadlock has stalled progress.
The war between Israel and Iran-backed Hezbollah only exacerbated this crisis. In March, the World Bank estimated that Lebanon requires approximately $11 billion to rebuild following the 14-month war that concluded with a ceasefire in November 2024.
Know more: The ceasefire remains fragile amid ongoing Israeli strikes and a continued presence of Hezbollah, as does Lebanon’s fledgling government.
Tensions flared this week in Lebanon after Iran’s ambassador to Lebanon, Mojtaba Amani, commented on calls from the Lebanese government for Hezbollah to disarm. Amani took to X on Friday, writing, “The project of disarmament is a clear conspiracy against nations. … When these countries submit to disarmament demands, they become vulnerable to attack and occupation, as happened in Iraq, Libya and Syria.”
Following his comments, Asharq Al-Awsat reported that Lebanon’s foreign minister, Youssef Rajji, planned to summon Amani over the ambassador’s comments.
On Wednesday, however, Amani reversed course, saying in an interview with Al Jadeed that “we are committed to what the Lebanese agree upon.”
Amani also stated that he did not attend the summons issued by Lebanon’s Foreign Ministry. “I was informed of the Foreign Ministry’s request regarding my posts about weapons, but I apologized for not attending,” he said. “No new date has been set.”
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