Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Many governments finance public works projects through borrowing from the Multilateral Development Banks. Please refer to “Project Financing” Section for more information.
The Council for Development and Reconstruction (CDR), a public authority established in 1977, is the government body responsible for major public infrastructure projects in Lebanon. The CDR reports to the Council of Ministers (i.e. cabinet) and coordinates its sector-based actions with the relevant ministries. Generally, the CDR publicly solicits offers before awarding major construction contracts.
Ministries may solicit for services valued below LBP 100 million ($66,357). Ministries publish these requirements online and in local newspapers. However, for works that exceed the threshold, the public tendering department is responsible for launching these tenders, unless the cabinet authorizes the relevant ministry to launch the tender directly. U.S. companies can apply directly for these tenders or can rely on local agents to bid on their behalf.
Lebanon does not abide by the World Trade Organization (WTO) - Government Procurement Agreement (Lebanon is not a WTO member). Lebanon lacks unified public procurement legislation, and a modernized law is with Parliament for its consideration.
U.S. companies bidding on Government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.
The Council for Development and Reconstruction (CDR), the government’s executive body for redevelopment, has a total of $2.8 billion in loans and agreements ratified by Parliament but not yet disbursed. An additional $670 million in loans from international donors and development banks await Parliament’s approval. The CDR has a limited absorptive capacity and targets annual spending at approximately $750 million. Since 1992, CDR completed 4,936 contracts valued at USD 12.3 billion mainly in infrastructure projects all over Lebanon. CDR has currently ongoing contracts valued at USD 3.6 billion.
About 15 foreign financing sources are involved in CDR’s development plan, with 11 sources contributing to over 90 percent of the CDR’s total foreign financing. Primary contributors include the World Bank, the Arab Fund for Economic and Social Development (AFAED), the Kuwaiti Fund (KFAED), the European Union (EU) and the European Investment Bank (EIB), the Islamic Development Bank, the Saudi Fund for Development (SFD), and the Governments of Saudi Arabia, Italy, and France. For more information about CDR, you can visit CDR’s website.
Multilateral Development Banks and Financing Government Sales
- The U.S. Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the World Bank. These institutions lend billions of dollars to developing countries on projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help American businesses participate in bank-funded projects, and advocate on behalf of American bidders. Learn more by contacting the Advocacy Liaison Website for World Bank and World Bank.
The International Finance Corporation (IFC), the private sector focused wing of the World Bank Group, has invested over $1 billion in supporting Lebanese firms. The IFC also works to streamline business registration and improve access to finance for MSMEs (micro and small and medium enterprises) and women-led businesses. The IFC also provides assistance to develop the regulatory framework for the Tripoli Special Economic Zone (TSEZ). Moreover, the IFC supported local commercial banks in the initial issuance of “green bonds” for projects that have positive climate impacts. The IFC advises the High Council for Privatization and Partnerships (HCP) for the expansion of the Rafic Hariri Beirut International Airport and has an advisory role with the Ministry of Energy and Water for the construction of two gas power plants.
The EBRD (European Bank for Reconstruction and Development) began operations in Lebanon in September 2017. It focuses support for private sector competitiveness, sustainable energy supply, and the quality and efficiency of public service delivery. As of March 2019, EBRD has invested around 300 million Euros, primarily through top Lebanese banks, including a Green Economy Financing Facility, a green bond, an SME credit line, an equity stake in a local bank, and in trade finance. EBRD has also signed a direct corporate loan to a private electricity distribution services provider and is exploring investments in the power, agribusiness, manufacturing, natural resources, industrial zones, and municipal and infrastructure projects. EBRD forecasts a pipeline of Euros 1.1 billion over six years for CIP infrastructure projects and other sectors beyond the CIP. In 2018, EBRD launched its EU-funded Advice for Small Business program to provide businesses with the knowledge needed to reach their growth potential, ranging from strategy and marketing to financial management to energy efficiency improvements.
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