BrazilLebanon signs consulting contracts for initial CEDRE projects
The Higher Council for Privatization and Public Private Partnership has signed a historic agreement with multiple players in the private sector attracting over $11 billion in soft loans and grants. The deals were made in the wake of the Council for Economic Development and Reconstruction investment conference in Paris in April this year.
The CEDRE conference brought together delegates from the public and private sector in Lebanon as well as international investors and a number of strategic advisors. Secretary General of the High Council for Privatisation, Ziad Hayek unveiled three development projects at the conference which are included in the Capital investment program.
The projects include the expansion of Rafic Hariri International airport and building a new passenger terminal, building a Khaldeh-Nahr Ibrahim road, and launching a National Information Center. These three projects, worth over $4 billion, are to be undertaken in public private partnership in line with the Capital Investments program.
Hayek commented in relation to the projects; “The advisors will assist in preparing the files and the complete studies related to each project. They are also tasked with finding interested investors to participate in the tenders.” All three of the projects presented were snapped up by private investors and consultancy firms raising over $11 billion in total.
Hayek said that he was “very happy” with the result, especially due to the support from the international community. “It is the first step in a 1,000-mile-long journey,” he added, citing Lebanon’s path to reconstruction and making the country a more attractive place for private investment.
The International Finance Corporation was appointed as transaction advisor for the project to expand Beirut Rafic Hariri International Airport. The investment and advisory institute has 21 months to complete the study about the 20 million capacity expansion. When completed, Beirut Airport would have just shy of Abu Dhabi International Airport’s passenger capacity and will be the size of the international airports in Bahrain and Kuwait put together.
The European Bank for Reconstruction and Development (EBRD) has become the transaction advisor for the development of Khalde-Nahr Ibrahim Highway. The European financial institution will take on the responsibility over a period of three years and will attempt to attract investors to the 38km development.
Global professional services giant KPMG has landed the third priority project. The firm – which has been heavily active in the digital realm in the Middle East recently – has just 14 months to develop the National Information Center. The deal was made between KPMG Lebanon and the Higher Commission for Privatization and PPP at a ceremony in Grand Saray, Dubai last week.
The National Center will consist of two individual data centres, kept separate from each other for security reasons, and located in Dekwaneh and Erbaniyye. Together, they will form the basis of Lebanon’s cloud-based platform and will facilitate IT services for public entities, private banks and companies, and local individuals.
KPMG Lebanon’s CEO Nafez Merehbi signed the proposal with Hayek in regards to the proposal, with Merehbi thanking Hayek and the Lebanese government for the opportunity be involved in the push to digitalise the Lebanese economy, stating that the project is of strategic importance for Lebanon and the region.
The deals will be the first to test the new legal framework for public-private partnerships (PPP) in the country. Lebanon’s Prime Minister Sa’ad Hariri said; “The importance of these [agreements] is that these projects are being launched under the PPP law. They’re the first ones to be subjected to it and … the PPP law is very important for us to be able to carry out PPP projects successfully, with transparency and involving all stakeholders.”
President Emmanuel Macron of France, the host nation of the CEDRE conference, praised the international community’s support for Lebanon, saying that it showed “unprecedented mobilisation” for building the foundations of a sustainable peace in the Middle East. “At a time when the Levant probably lives one of the worst moments of its history ... it’s more important than ever to preserve the most precious asset: a peaceful, diverse and harmonious Lebanon,” Macron said.
Hariri, who met with Macron at the conference, laid bare Lebanon’s situation in the volatile region, citing the country’s unstable past and saying that if Lebanon again descended into chaos, it would have repercussions throughout Europe and the Middle East. "We are a little country facing enormous political, economic and security challenges and these challenges are exacerbated by the war in Syria and the crisis of displaced Syrians in Lebanon," the Prime Minister said. “It is not the stability of Lebanon alone. This is the stability of the region and, therefore, of our world.”
