The European Investment Bank (EIB) has signed the "Lebanon Private Sector Support" project, a line of credit in a combined amount of EUR 265million to support projects conducted by small- and medium- sized enterprises (SMEs) and mid-cap companies in Lebanon.
This facility represents one of the first operations under EIB's "Economic Resilience Initiative" (ERI), which aims to contributeto the sustainable growth of the Lebanese economy and support its resilience in the context of the refugee crisis in the wider region.
ERI helps to shock-proof the region by supporting vital infrastructure and much-needed private-sector development. SMEs make up the vast majority of firms in the region and are key drivers for growth and job-creation.
The project will be implemented by four Lebanese banks, each with a dedicated loan amount: Byblos (EUR 100 million), Fransabank (EUR 75 million), Societe Generale de Banque au Liban (EUR 60million) and First National Bank (EUR 30 million).
Dario Scannapieco, EIB Vice President said: "These investments aim to improve SMEs' and midcaps' access to finance in Lebanon. In the context of our new Economic Resilience Initiative, they are also part of our strategy to help countries like Lebanon meet the challenge of forced displacement in the Syrian Neighbourhood. A comprehensive response to this challenge means that in addition to the much needed short-term assistance, we in Europe must provide longer-term support to build stability, resilience and prosperity beyond our borders. Small- and medium- sized businesses play an incredibly important role in innovation, growth and employment. So, supporting them in the context of offering economic opportunities and building economic resilience is one of the EIB's top priorities."
He added: "Lebanon has a strong banking sector capable to effectively cater to the local private sector. Together with our long-standing partners on the ground, we can give aboost to SMEs and midcap companies benefitingfrom their strong track record and local market knowledge."
The EIB Vice President also said: "The ERI for the Western Balkans and Southern Neighbourhood allows the EIB to step up its engagement in a very challenging environment. The ERI is adopting a holistic approach to tackling the refugee crisis and the longer-term challenge of migration by helping to build economic resilience in these countries. Through investment in the private sector and vital infrastructure, it aims to create opportunities for employment and improve both the daily living and business environment.This operation shows that we have the existing structures in place to make this happen now andbring to the people of the region, stability and prosperity."
Ambassador Christina Lassen, Head of the Delegation of the European Union to Lebanon, said: "The signature today again shows that EU institutions are joining efforts to support private sector development in Lebanon, and create better conditions for economic growth." She added: "This EU support to the private sector is there to make a difference. More importantly, it is there to give a push to those companies and individuals that can reinvigorate the economy in Lebanon and inject much needed dynamism."
The ERI, promoted and supported by the European Union, is part of the joint response by EU member states to the challenges posed by forced displacement and migration. It will contribute to greater economic resilience in the EU's Southern Neighbourhood as well as the Western Balkans by boosting economic development. Investment in SMEs iscomplemented by investments to increase the provision of services like transport, energy, water, municipal services, health and education. The ERI will achieve this by providing an integrated and substantial package of loans, concessional finance and technical and administrative assistance during the 2016-2020 period. It is designed to enable financing of an additional Euros 15 billion of investments on top of investments already foreseen.
The EIB is a longstanding partner to Lebanon. Over the years, the Bank provided a total finance of EUR 1.6 billion across many sectors: energy (EUR 112 million), transport (EUR 335 million), equity (EUR 26.5 million), water and wastewater (EUR 401 million) as well as private sector development (EUR 705 million). The Bank is working closely with the government of Lebanon to provide necessary finance for needed projects.
Source: National News Agency