Overview

  • One of the key issues facing Lebanon is the economic and social impact of the Syrian crisis, now in its seventh year. According to government and independent sources, up to 1.5 million Syrians, about a quarter of the Lebanese population, have taken refuge in Lebanon since the conflict started in March 2011.

    This has strained Lebanon’s public finances, service delivery, and the environment. The crisis is expected to worsen poverty incidence among Lebanese as well as widen income inequality. In particular, it is estimated that as a result of the Syrian crisis, some 200,000 additional Lebanese have been pushed into poverty, adding to the erstwhile 1 million poor. An additional 250,000 to 300,000 Lebanese citizens are estimated to have become unemployed, most of them unskilled youth.

    Within this challenging environment, GDP growth in Lebanon in 2016 is estimated to have undergone a slight acceleration to reach an estimated 1.8 percent, compared to 1.3 percent in 2015. The acceleration was driven by an improvement in the real estate sector and an increased number of tourist arrivals. Nonetheless, economic activity remains well below potential, inhibited by decidedly volatile geopolitics and security conditions.

    The deflationary trend has reversed in 2016, reaching -0.8 percent, compared to -3.7 percent in 2015. The fiscal deficit continued to widen in 2016 to reach 10 percent of GDP, primarily due to a growth in expenditures outpacing revenues. Public finances are structurally weak and worsening, and in urgent need of reforms. Public debt continued to rise (157.5% of GDP at end-2016), due to low growth and a relatively high cost of debt financing.

    Last Updated: Apr 01, 2017

  • The World Bank Group (WBG) Country Partnership Framework (CPF) FY17-FY22 for the Lebanese Republic was launched on July 14, 2016. The Lebanon CPF which was informed by a broad range of consultations with the Government, Parliament, the private sector and civil society is focused on: (i) scaling up access to and quality of service delivery; and (ii) expanding economic opportunities and increasing human capital. 

    Through these two focus areas, the WBG will help Lebanon mitigate the economic and social impact of the Syria crisis, safeguard the country’s development gains, and enhance stability and development prospects in the coming years.
    In parallel, the International Finance Corporation (IFC) will continue to support private sector development through investments and advisory work in key sectors with the aim to increase employment opportunities. MIGA will continue to work together with IFC to identify potential opportunities for support through its guarantee products.  The theme of governance and renewing the social contract cuts across the CPF with the aim of regaining the trust of citizens through the promotion of social and economic inclusion and enhancing the quality of public services. The CPF also mainstreams gender into the two focus areas, in particular in the area of expanding economic opportunities and increasing human capital.

    In cooperation with other regional and international development partners, the WBG is deploying concessional resources to help Lebanon respond to the impact of the Syrian refugee crisis through an exceptional US$100 million International Development Association (IDA) allocation and the establishment of the Global Concessional Financing Facility. This is in addition to the multi-donor trust fund established in December 2013, the objective of which is to finance through grants a number of projects directly linked to the impact of the Syrian crisis on the Lebanese citizens.

    As of March 6, 2017, the World Bank portfolio consists of 14 projects (investment lending and grants) totaling US$1.3 billion. The largest portion of the Bank’s engagement in Lebanon (US$674 million) is earmarked for the water sector.

    International Finance Corporation (IFC)

    IFC’s strategy in Lebanon focuses on financial markets (including microfinance) to increase access to finance for Micro, small and Medium Enterprises (SMEs). In addition, selective investments in infrastructure and manufacturing sectors are underway to help create jobs, and intra and inter regional investments with Lebanese investor.

    IFC advisory activities seek to improve investment climate and introduce innovative approaches that leverage the dynamism of Lebanon’s private sector in areas such as climate change (through sustainable energy finance), women in banking, corporate governance, and SME Development.

    Given the prevailing humanitarian crisis in Lebanon, IFC will continue collaborating with entities providing support to local communities faced with increasing economic pressure as a result of the Syrian crisis, such as Al Majmoua Microfinance, among others IFC plans to reach out to refugee and other underserved markets. IFC’s portfolio in Lebanon has nearly doubled since 2010 and current outstanding portfolio stands at US$495 million across 14 companies, mostly in financial institutions, followed by construction and retail.

    Multilateral Investment Guarantee Agency (MIGA)

    In 2014, MIGA insured its first ever project in Lebanon in the electricity distribution sector, with an outstanding gross exposure of US$35 million as of September 2016. The project entails a four-year power distribution service provider contract with EDL to provide electricity metering and related services for the Northern Lebanon region. The agency is seeking to support more projects in the country aligned with the Lebanon CPF FY17-FY22.

    Last Updated: Apr 01, 2017


  • • About 150 km of water supply and wastewater collection networks installed, and some 200 km of water supply networks rehabilitated across the Bekaa region, with direct and significant impacts to help host communities cope with the influx of Syrian refugees.  About 1,100 new household connections established in the poor areas of Southern Beirut.

    • Access to basic services improved, in municipalities across the whole country, with the construction and upgrade of local infrastructure, rehabilitation of local roads, soil protection measures, street lighting, and improvement of municipal services.

    • About 50 urban spaces upgraded, including marketplaces, squares, ports, downtowns, and gardens, all in key urban locations, providing safe public space for communities to meet, socialize, and helping local businesses have opportunities to grow.

    • Seven grade separation/bridges at critical intersections built; Traffic Management Organization created and a Traffic Management Center is operational and controlling 220 traffic signals, 55 CCTV cameras, and 896 park-meters installed under the project. 

    • National Poverty Targeting Program scaled up, to mitigate the impact of the Syrian conflict, reaching about 460,000 individuals (105,000 households) for hospitalization and education benefits.  The poorest 53,000 beneficiaries (10,000 households) also receive monthly food assistance via the e-card food voucher.  

    • A World Bank-administered Multi-Donor Trust Fund has received about US$186 million in contributions from the donor community. Five projects for a total amount of US$167 million have been approved under the fund: Municipal Services Emergency Project; Emergency Education System Stabilization Project; Emergency Primary Healthcare Restoration Project; Additional Financing to the Emergency National Poverty Targeting Program; and Support to Reaching all Children with Education (RACE 2) Program.

    • As of 2016, IFC’s long-term finance commitments in Lebanon have totaled US$495 million for its own account and through mobilization in microfinance, banking, sustainable energy finance, and energy distribution, while over US$2 billion of trade has been supported through IFC’s Global Trade Finance Program (GTFP) to Lebanese banks to support trade and SME development.  Despite challenges, since 2016, IFC committed total of US$25 million in loan investments: Fransabank (US$14 million); Lebanese Leasing Company (US$3.5 million); BLC SME Risk Sharing Facility (US$2.5 million); Vitas Microfinance (US$4.0 million) and Al Majmoua (US$3 million). In addition, IFC provided US$367 million in trade finance guarantees.

    • MIGA project: The project is proceeding relatively well, having faced delays in payments from EDL in the past. In December 2016, MIGA was informed that the distribution service provider (DSP) contract was extended for another 4-years.

    Last Updated: Apr 01, 2017

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Additional Resources

Country Office Contacts

Beirut, +(961-1) 962 900
Bourie House 119, Abdallah Bayhum Street Marfaa - Solidere
mziade@worldbank.org