World Bank-Run Trust Fund Targets Lebanese Municipalities to Offset Spillovers of Syrian Crisis

September 12, 2014

BEIRUT, Lebanon, September 12, 2014 - A multi-donor trust fund designed to support Lebanese communities hosting Syrian refugees launched its first project on Friday (September 12, 2014) with the signing of a US$10 million grant to municipalities most affected by an influx of more than 1.5 million people, roughly a quarter of Lebanon’s population.

Minister of Finance Ali Hassan Khalil, Nabil Jisr, President of the Council for Development and Reconstruction,  and World Bank Director for the Mashreq region Ferid Belhaj signed the grant and project agreements at an official ceremony at the Ministry of Finance. The event was attended by UN representatives and diplomats whose countries also are contributing to the Lebanon Syrian Crisis Trust Fund (LSCTF), namely Norway, Finland and France.

Belhaj also signed an administration agreement with French Ambassador Patrice Paoli, allowing the transfer of a US$10 million French grant to the LSCTF, which holds about US$30 million in its coffers. Norway was the first country to engage in the trust fund. Finland followed suit and more recently, France weighed in with its contribution.

According to Bank estimates, Lebanon would need US$1.6 billion to weather the crisis and maintain the very basic services to its population and the guests, and the World Bank Group is working with the international community to scale up financial support to the country.

In an impassionate appeal for more international aid, Khalil referred to the “disappointment” expressed by World Bank President Jim Yong Kim during his visit in June, when he stressed that the donor community needed to step up its support to stave off the disastrous impact of the refugee crisis.

Khalil lauded the World Bank’s efforts on the global arena to drum up support for Lebanon and said that the trust fund initially had “drawn skepticism and concern” about its mechanism, but that the Government and the World Bank will cooperate “with the highest degree of management professionalism and transparency” to ascertain the funds reach the targeted communities.   

Jisr, heads the implementing agency for the project, paid tribute to the Bank’s efforts on behalf of Lebanon, starting with the Economic and Social Impact Assessment of the Syrian crisis on Lebanon concluded last year, through the establishment of an International Support Group and finally the creation of the trust fund.

All agreed that much more is needed to reverse Lebanon’s social and economic woes.

“The world needs to come to Lebanon’s rescue. The country is facing an existential threat, and it cannot be left alone to confront a crisis that is not of its own making or under its control,” Belhaj said. “But we remain optimistic that the international community will step up support to Lebanon as it grapples with economic, social, security and political spillovers of the conflict next door.” 

The fund’s first project targeting municipalities that have been most strained by the crisis will provide priority interventions at the local level through maintaining basic services, providing critical infrastructure and promoting social cohesion. It will help the Lebanese hosts address urgent community priorities in such services as water, sanitation, roads and community activities, targeting areas most affected by the influx of Syrian refugees. 

In response to a request from the Government of Lebanon, the Bank is administering the LSCTF in accordance with the institution’s policies and procedures, including fiduciary policies and the framework regarding governance and anti-corruption. The oversight of the fund’s activities rests with a Steering Committee which provides overall strategic direction and which comprises Government representatives, the World Bank, UN representatives and contributing donors. 

“This mechanism gives comfort to donors and ensures that projects are funded in a transparent and efficient way. We will ask for more funding during the upcoming meeting of the International Support Group for Lebanon which will be organized on the margins of the UN General Assembly later this month in New York," Belhaj explained.

The international effort to support Lebanon builds on an extensive Economic and Social Impact Assessment of the Syrian crisis on Lebanon which the World Bank compiled last year. The assessment led to the creation of the International Support Group for Lebanon in New York last year. The assessment contained astonishing findings, including an estimate of direct and indirect damage to the Lebanese economy to the tune of US$7.5 billion.

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