The World Bank has approved its largest-ever financing of a project in Lebanon, a $474 million water supply development scheme aimed at addressing severe shortages faced by over half of the country’s population.
The Water Supply Augmentation Project will be developed over nine years and will benefit more than 1.6 million people living across the Greater Beirut and Mount Lebanon area, Ferid Belhaj, World Bank Director of the Middle East Department, told The Daily Star.
The $474 million World Bank loan that will be complemented by $128 million in financing from the Islamic Development Bank will require ratification by both the Lebanese Parliament and government, which is also expected to make a $15 million investment in the project.
The World Bank expects the government to swiftly ratify the loan mainly because the project enjoys broad support across the political spectrum due to its importance on the national level, Belhaj said.
The loan will be repayable over 20 years, including a five-year grace period, at standard variable interest rate for LIBOR-based loans, according to Belhaj, who described the project as “an investment in the future of Lebanon.”
Belhaj noted that the project was the focus of several rounds of in-depth dialogue over the past months between World Bank representatives and government officials.
However, once it is officially approved by the government, the loan should be ratified by Parliament, which might prove a trickier issue.
Domestic bickering over key political issues that begin with the election of a president and span to the state’s public finances have blocked legislative work for long periods over the past few years, resulting in the delay of several vital infrastructure projects.
Accordingly, it would be harder to predict when Parliament would ratify the project financing that could face some delays under the current circumstances, Belhaj said.
From the time the project takes off, the Council for Development and Reconstruction is expected to complete within a five to seven-year period the construction of a 73-meter-high dam in the Chouf village of Bisri with a 125 million cubic meters storage capacity, the second-largest dam in Lebanon after Karoun.
“Over the last few months, the [World Bank] team has engaged with all possible stakeholders and CDR did a fantastic job at making sure that everybody would be consulted and see the benefits of the project,” Belhaj said.
The project, which will be implemented over nine years to allow for the startup work ahead of construction and two years of operation and maintenance, comes at a time when Lebanon is facing an increasing water deficit for both household and agricultural use.
The project will deliver benefits to 1.6 million residents across the GBML region, including 460,000 people living on less than $4 per day, the national poverty line, Belhaj said.
Belhaj added that the project is an integral part of the government’s 2012 National Water Sector Strategy aimed at delivering increased access to water supply and irrigation across Lebanon, which stores only 6 percent of annual available water.
The Water Supply Augmentation Project was designed to complement the Greater Beirut Water Supply Project better known as the Awali project. The Awali project, which is partially funded by the World Bank, was designed to meet the short-term needs of the GBML area for potable water.
Households in the GBML area spend up to 15 percent of household expenditure on securing water, a survey of 1,200 beneficiary households shows, the World Bank said.
By adding the Bisri dam upstream of the Awali infrastructure, the World Bank noted that the government will secure water for the GBML in the medium and long term.
Water stored in the Bisri dam will flow to Beirut through an underground tunnel, the Ouardaniyeh water treatment plant and large storage tanks currently under construction as part of the Awali project.
The World Bank will be supervising the project throughout its implementation phases and disbursing funds in installments as necessary during each phase, Belhaj said.
An international panel of experts on dam safety will also be responsible for reviewing the technical, and safety aspects of the dam design while mitigating environmental and social on local communities that should benefit from employment opportunities, Belhaj added.
The Daily Star