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Statement July 28, 2020

Statement by World Bank Mashreq Regional Director Lebanon Water Supply Augmentation Project (Bisri Dam Project)

Beirut, July 28, 2020 – The World Bank notified the Government of Lebanon (GOL) today of its approval to extend the deadline to fulfill the requirements of the Loan agreement of the Bisri Dam project to September 4, 2020.

The Bisri Dam project has been under partial suspension since June 26, 2020. The World Bank had informed the GOL that the loan funding the project would be cancelled unless the World Bank receives satisfactory evidence from the GOL that the tasks that are preconditions to the commencement of construction of the dam are completed by July 22, 2020, as per the Loan agreement terms.

The GOL submitted a draft Ecological Compensation Plan (ECP) on July 9, 2020 and is currently updating it based on comments provided by the World Bank, the Ministry of Environment, other relevant Ministries and agencies of the Government of Lebanon. On July 17, 2020, the GOL provided the World Bank with information on the legal framework of the Operations and Maintenance (O&M) arrangements in Lebanon. However, and as per the Loan agreement of the Bisri Dam Project, a Memorandum of Understanding between the Ministry of Energy and Water and the Beirut Mount Lebanon Water Establishment is yet to be finalized. As of today, the contractor hasn’t been able to remobilize.

On July 20, 2020, the GOL requested a 3-month extension of this deadline to allow more time to finalize the ECP, the O&M arrangements and mobilize the contractor on site.

Based on progress to date, and in light of the series of unprecedented, compounded challenges that the country is enduring – including those resulting from the Covid-19 crisis – that may have hampered the Lebanese authorities’ ability to perform their obligations under the Bisri Dam Loan Agreement, the World Bank has agreed to provide the GOL an extension of the deadline to September 4, 2020.

The World Bank reiterates once more the urgent need for the GOL to maintain an open, transparent and inclusive consultative process with all Lebanese stakeholders, and to ensure peaceful dealings with activists and civil society representatives opposing the project. In this regard, the World Bank has requested to receive an update on the Government’s ongoing engagement with Lebanese stakeholders on the Bisri dam project, including through online consultations on the ECP in view of the COVID-19 situation. The GOL is also encouraged to explore establishing an independent third party to initiate dialogue with all stakeholders.

Unless the World Bank receives satisfactory evidence of completion of the requirements mentioned in the June 26, 2020 letter by no later than September 4, 2020, the suspended portion of the Loan under the Bisri Dam project will be cancelled. In that event, the World Bank would be ready to work with the Government of Lebanon to see how the cancelled amount could be used most effectively to respond to the emerging needs of the Lebanese people.

The World Bank also wishes to reiterate its zero-tolerance policy on the misuse of funds under the projects it finances. The World Bank procurement policies and regulations enforce open, transparent and competitive processes in the selection of contractors, consultants and vendors.