BEIRUT, 21 February 2007 — The United Arab Emirates granted yesterday a soft loan of $300 million to Lebanon, in the first batch of billions of dollars of international aid to help revive the country’s ailing economy.
“We signed the first agreement within the Paris III conference, and it stipulated a $300 million assistance from the United Arab Emirates,” Finance Minister Jihad Azour said. Lebanon secured pledges for over $7.6 billion from donors at a conference in Paris last month.
Lebanon’s has a huge public debt which ballooned to $41 billion or more than 180 percent of gross domestic product.
Azour said the 20-year soft loan will have an interest rate of 2.5 percent and a grace period of five years.
The UAE loan was granted to Lebanon through the Abu Dhabi Development Fund. Among the top donors at last month’s conference were Saudi Arabia, US and EU. Prime Minister Fuad Siniora’s administration has mapped out a five-year economic reform plan that includes a two percent rise in value-added tax (VAT) to 12 percent from 2008 and privatizing the electricity and mobile telephone sectors.
