The FINANCIAL — The World Bank Group has earmarked US$200 million for upgrading Lebanon’s road network, seen as a risk to public safety as well as an impediment to urban-rural development and equitable economic growth.
The funds will be used to repair around 500 kilometers of roads in the first phase of a broader government plan to revamp the country’s crumbling road sector.
The Roads and Employment Project, approved on Monday by the Bank’s Board of Directors, includes a US$45 million grant from the Bank-administered Concessional Financing Facility (CFF). It is the first time Lebanon has received funding from the CFF, a facility created in 2016 to support middle-income countries that have in the past been recipients of regular Bank financing, but are currently experiencing unusual social and economic duress, according to the World Bank.
“This is to help Lebanon continue to offer basic services both to its citizens and to Syrian refugees in the country,” said Ferid Belhaj, the World Bank’s Director for the Middle East. “By hosting refugees, Lebanon is offering the international community a global public good. International financial support needs to increase to match its generosity.”
The presence of more than 1.5 million Syrian refugees has put unprecedented pressure on Lebanon’s already strained infrastructure. It has also fueled social tensions, and changed the labor market by increasing the workforce by 35 percent. The road repair works would help provide more low-skilled jobs.
“Historically, the construction sector has been a primary source of income for poorer Lebanese and Syrians,” stated Ziad El Nakat, Senior World Bank Transport Specialist. “And it continues to play this role.”
The Roads and Employment Project would “also improve the quality and safety of the road network, particularly in less developed regions of the country, improving connectivity, reducing the cost of transport, and helping local economies develop through better access to markets and services,” he said.
Lebanon has one the highest per capita rates of road accidents in the world. The World Health Organization estimated the total number of road traffic fatalities in 2015 at 1,088, and their associated economic cost at between 3 percent and 5 percent of GDP.
The importance of regaining public confidence by investing in the road sector is highlighted in a five-year, US$510 million government plan. The Bank-financed project is aligned with this, and will help the government mobilize other international development partners to provide additional funding.
The first phase of the plan has four key objectives: i) the rehabilitation and maintenance of existing road networks; ii) the improvement of road safety systems; iii) the purchase of equipment for emergency roadworks; and iv) the capacity building to improve management and efficiency in the sector. The project will include a survey of up to 6,000 kilometers of primary, secondary, and tertiary roads in all Lebanese regions to identify those in most need for rehabilitation.
The non-grant US$155 million loan portion of the package is repayable over 32 1/2 years, including a seven-year grace period. With this new package, the World Bank’s current commitment to Lebanon in grants, loans, and other concessional financing rises to US$1.3 billion.