View of Zaytouna Bay and the surrounding Beirut skyline. (Credit: Stephanie Bechara)
-Caretaker Energy Minister Walid Fayad announced that the In Ecker tanker departing from Algeria will arrive in Lebanon on Monday, Fayad said Friday, following a blackout by state power provider Electricite du Liban on Saturday due to fuel depletion. Since then, Lebanese residents have relied almost entirely on private generators for electricity.
The In Ecker tanker will carry the first cargo of 30,000 tons of fuel that Algeria is sending to Lebanon, as a donation. Other cargoes are set to follow but it remains unclear how much fuel will be included in these future shipments.
-According to Ahmed Hoteit, president of the Mill Owners' Association, the price of "Arabic bread" is expected to increase by LL 5,000 to LL 6,000 within a month as the stocks of subsidized wheat run out.
The subsidized wheat that was provided through a World Bank loan is expected to last until mid-September, and no plans to resume the subsidy have been discussed to date. Hoteit noted that even without the subsidy, the cost of wheat-to-flour processing was not subsidized. The transition will be from subsidized wheat priced at LL 60,000 per dollar to wheat purchased at LL 90,000 per dollar.
-Lebanese banking group Bank Audi confirmed in a statement on Monday that the International Finance Corporation (IFC), the private sector arm of the World Bank, along with an affiliated fund, filed a lawsuit against it in a London High Court. The lawsuit seeks the repayment of two subordinated loans made in 2014.
In March 2014, the IFC announced the signing of two subordinated loans totaling $150 million, with a repayment period of 10 years. Law360, a subscription-based legal news service based in New York, reports that two agreements were signed on March 27, 2014: One for £37.5 million (or $49.4 million) and another for $112.5 million. The news site added that the IFC accuses the Lebanese banking group of "failing to pay and refusing to pay" the interest due "between April 2020 and March 2024." However, the bank has already paid $66 million in interest up to 2020, and the loan matured in April 2024. The IFC considers that the interest is due upon maturity of the loan, Law360 further specified.
-The government approved, on Aug. 12, a bill aimed at taxing individuals and companies that have repaid large loans during these five years of crisis by “taking advantage” of the collapse of the Lebanese Lira and the subsequent varying exchange rates that emerged in the market as a result. It specifically concerns taxpayers who repaid loans taken out in Lebanese Lira or dollars at the time that the official exchange rate was in force (LL 1,507.5/USD) and well below the market rate.
-Less than a month after Fitch Ratings announced it could no longer measure Lebanon's creditworthiness, another major American agency, Standard & Poor’s (S&P), released its latest semi-annual report on Monday evening. In this report, S&P reiterated and clarified its previous assessment of Lebanon, which it has considered in selective default for the past four years.
Since then, Lebanon has received an "SD" (selective default) rating for its foreign currency debt in both the short and long terms. Its Lebanese Lira Treasury bills have been rated "CC" and "C" with a negative outlook. Although the state continues to honor these bills, their value has significantly declined due to the lira's collapse over the past five years. S&P’s ratings aligned with those of Moody’s and Fitch until the latter's announcement last July.
-Caretaker Prime Minister Najib Mikati met with caretaker Energy Minister Walid Fayad and World Bank Middle East Director Jean-Christophe Carre at the Grand Serail on Tuesday to discuss renewable energy projects, as a nationwide blackout grips the country. The meeting focused on the World Bank's $250 million program to finance renewable energy projects and support Lebanon's power systems.
-Lebanon's Caretaker Minister of Transport and Public Works, Ali Hamiyeh, announced on Saturday the launch of rehabilitation works for the Bekaa highway, which will cover all sections from Chtaura (Zahle) to Qaa (Baalbeck-Hermel), on the border with Syria, according to a press release issued by the state-run National News Agency (NNA). The route passes through Zahle, Riyaq and Baalbeck.
-Fuel prices saw a decrease across the board while domestic gas cylinder prices remained unchanged, according to the new price list published by the Energy and Water Ministry.
Here are the new prices:
Piece of the week
A new draft government plan to resolve the issue of blocked bank deposits is currently under discussion among key officials, bankers and experts. L'Orient-Le Jour obtained a copy of the plan, which was developed under the guidance of former minister of economy and trade Nicolas Nahas, a current advisor to caretaker Prime Minister Najib Mikati, who has taken over the file previously handled by Deputy Prime Minister and IMF negotiator Saade Chami. According to sources, the document is still subject to amendments before being submitted to the cabinet for approval.
The document, reviewed by L'Orient-Le Jour, estimates an average recovery rate of around 44 percent, but the rate will vary significantly depending on whether despitors’ accounts are deemed "eligible" or not. Read Mounir Younes’ piece:
