$700 million bond issue
Move to unlock $4 billion in funding for infrastructure
The government plans to issue within one month special bonds on the local market in order to raise $700 million, said Nadim Munla, senior adviser to the Prime Minister.
This move will help the State unlock additional funding of $4 billion for 40 infrastructure projects from international financial institutions such as European Investment Bank and the World Bank. The $700 million represents the local contribution necessary to unlock these loans.
There has been an agreement between the Central Bank, the Ministry of Finance, and the Prime Minister regarding the bond issue, Munla said.
The bonds are likely to be issued before the parliamentary elections that are scheduled for May 6. This will happen “after the approval of the budget,” Munla said.
The additional $4 billion aims to support the economy while the government will be seeking further funding for its infrastructure investment program. The Cabinet will present the $16 billion program to the Cèdre donor and investor conference which will be held on April 6 in Paris. The first phase of the program requires around $10 billion in funding.
“We believe that 30-35 percent of the (phase one) money needed will come from the private sector, so this leaves us with about a $6.5 billion-$7 billion funding gap,” Munla said.
The State also hopes to raise $1 billion in grants through the Cèdre conference which will allow it to borrow up to $4 billion on favorable terms, according to Munla.
Reported by Shikrallah Nakhoul
Date Posted: Mar 26, 2018