Environmental technology has received shot in the arm following the signing of a $100 million financing deal between the European Bank for Reconstruction and Development (EBRD) with Lebanon’s Bank Audi. The development marks the second such investment deal in the country in the last one year.
The deal sees EBRD providing Lebanon’s largest lender, Audi, a $90 million loan, complemented by $10 million in concessional funding from Taiwan’s foreign aid program TaiwanICDF. The deployment of funds is routed through the EBRD’s Green Economy Financing Facility (GEFF) program, said the EBRD.
Audi will lend money to Lebanese businesses in the private sector at “competitive” rates which have interests in environmental technology and sustainable development projects. Further, under an existing national scheme, eligible parts of some projects will benefit from lower interest rates that are subsidized by Lebanon’s central bank.
According to Samir Hanna, Audi’s Chairman, Audi would match the GEFF’s $100 million. This brings the total available green financing package to $200 million.
This financial package aimed at boosting environmental technology and sustainable development projects in Lebanon comes at a time when economic activity is moving at a reduced pace due to deepening political troubles. Although six months have past since parliamentary election, Lebanon has yet to form a government. Unless this is resolved in time, it could lead to an economic crisis.
A top priority for Lebanon’s new government would be reforming the electricity sector, said the World Bank describing the subsidies as a “staggering burden” on national finances. According to the International Monetary Fund (IMF) the lack of clarity in the political arena has increased vulnerabilities in Lebanon’s financial system. Lebanon has the world’s third-largest public debt-to-GDP ratio.
Earlier this year in April, EBRD made its first green investment in Lebanon by subscribing to a green bond issued by Fransabank for $15 million. These investments in environmental technology and sustainable development projects marks the second such investment made by the EBRD.