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words Jody Jaffe    

Illustration Riad Hanna-el-daher

Lebanon seems to be constantly teetering on the brink of collapse. The garbage crisis was resolved only recently, the most basic amenities – electricity and water – are constantly in short supply, and the country is hosting more refugees than it can possibly handle. In addition, the presidential vacuum that has existed for almost two years means that important decisions are still on hold.  Lebanon is on a steady decline, with little hope for progress in sight. Despite all of this adversity, the Governor of the Banque du Liban (BDL) has strived to maintain order and equilibrium in this fragile country.  Thanks to his unwavering leadership, the national currency is still miraculously stable and the BDL continues to spearhead empowering initiatives and provide loans for sustainable development.

The Banque du Liban (BDL) has been keen, over the past few years, on fostering sustainable growth. It has, in this regard, launched a series of initiatives and stimulus packages to boost private sector investments in vital sectors, with the aim of contributing to economic, social, and environmental development and ultimately more job creation.

Through its loan incentive packages, the BDL has been promoting environmentally-friendly initiatives. Whether related to energy saving, renewable energy, pollution abatement, solid waste, recycling, or eco-tourism, the BDL has been striving to make the Lebanese economy greener, not only for the resulting health benefits, but also for the economic ones. One of those initiatives is the National Energy Efficiency and Renewable Energy Action, a national financing mechanism that the BDL developed in collaboration with the UNDP in 2010. It aims at supporting green activities. Such strategies effectively fall within the general mission of the Central Bank, which includes “ensuring the basis for sustained social and economic growth” (as stipulated by Article 70 of the Code of Money and Credit).

In this regard, the BDL issued Intermediate Circular 236 dated November 2010, specifying the financing mechanism of NEEREA: long-term financing (up to 14 years) of energy efficiency, renewable energy, and green buildings projects through banks with interest rates ranging between 0 percent and one percent. This Circular is in effect the fruit of collaboration between the Ministry of Energy and Water and the Central Bank of Lebanon.

It is worth noting that Lebanon’s current energy needs are met with annual energy imports amounting to $6 billion. Savings, ranging between 10 percent and 20 percent of Lebanon’s energy bill, could lead to tremendous improvements in the balance of payments.

Environmentally-friendly loans

In 2013, the BDL pushed the environmental agenda even further by including environmentally-friendly loans within its first stimulus package. This stimulus consisted of providing low-cost incentives to the private sector through banks to encourage investments in vital economic sectors such as tourism, agriculture, industry, IT, housing, education, and the environment, including NEEREA. Given its concrete benefits to the national economy, the package has been renewed for three consecutive years.

Moreover, the UNDP and the EU’s support to the Lebanese environment, amounting to 12 million euros, is evidence of the growing importance of the Green Economy, and of Lebanon’s eagerness to promote such initiatives. In fact, green investments have reached more than 256 loans, amounting to around $500 million. They have effectively created 10,000 new jobs directly or indirectly, as a result of the growing number of companies working in this sector, in addition to the increasing number of projects in this field, and more importantly, the development of relevant fields of study.

Today, the BDL, in collaboration with the Ministry of the Environment, is striving to support the green economy further, and thus foster sustainable growth, by providing more financial mechanisms to the environmental sector, as it did with the energy sector through NEEREA. The BDL is also encouraging pollution abatement projects, in collaboration with the Ministry of the Environment, by providing very low cost of credit (around zero percent), and for periods ranging between seven and 10 years. The Lebanese banking sector is more than ready to support any sustainable national initiative with a green twist.

The green roof

The Green Roof is another project that the BDL itself pioneered, with the aim of promoting green spaces in urban areas, taking into account all the benefits that emanate from it. The Central Bank dedicated an area of 834 square meters in its main headquarters in Hamra, and launched its very own “Green Roof” on the 30th of June 2014, in cooperation with UNDP’s CEDRO project. By launching such an initiative, the BDL hopes that it will inspire other public and private institutions to follow in its footsteps, and promote more green spaces.

In addition, the BDL has been prompting the banking sector to respect and adopt international environmental standards for due diligence when granting loans, such as the “Equator Principles:” a risk management framework, for determining, assessing, and managing environmental and social risk in projects, intended to provide a minimum standard for due diligence to support responsible risk decision-making. Such endeavors fall within the umbrella of BDL’s Corporate Social Responsibility.

In fact, green investments have reached more than 256 loans, amounting to around $500 million. They have effectively created 10,000 new jobs directly or indirectly, as a result of the growing number of companies working in this sector, in addition to the increasing number of projects in this field, and more importantly, the development of relevant fields of study.

The Banque du Liban (BDL) has been keen, over the past few years, on fostering sustainable growth. It has, in this regard, launched a series of initiatives and stimulus packages to boost private sector investments in vital sectors, with the aim of contributing to economic, social, and environmental development and ultimately more job creation.

Through its loan incentive packages, the BDL has been promoting environmentally-friendly initiatives. Whether related to energy saving, renewable energy, pollution abatement, solid waste, recycling, or eco-tourism, the BDL has been striving to make the Lebanese economy greener, not only for the resulting health benefits, but also for the economic ones. One of those initiatives is the National Energy Efficiency and Renewable Energy Action, a national financing mechanism that the BDL developed in collaboration with the UNDP in 2010. It aims at supporting green activities. Such strategies effectively fall within the general mission of the Central Bank, which includes “ensuring the basis for sustained social and economic growth” (as stipulated by Article 70 of the Code of Money and Credit).

In this regard, the BDL issued Intermediate Circular 236 dated November 2010, specifying the financing mechanism of NEEREA: long-term financing (up to 14 years) of energy efficiency, renewable energy, and green buildings projects through banks with interest rates ranging between 0 percent and one percent. This Circular is in effect the fruit of collaboration between the Ministry of Energy and Water and the Central Bank of Lebanon.

It is worth noting that Lebanon’s current energy needs are met with annual energy imports amounting to $6 billion. Savings, ranging between 10 percent and 20 percent of Lebanon’s energy bill, could lead to tremendous improvements in the balance of payments.

Environmentally-friendly loans

In 2013, the BDL pushed the environmental agenda even further by including environmentally-friendly loans within its first stimulus package. This stimulus consisted of providing low-cost incentives to the private sector through banks to encourage investments in vital economic sectors such as tourism, agriculture, industry, IT, housing, education, and the environment, including NEEREA. Given its concrete benefits to the national economy, the package has been renewed for three consecutive years.

Moreover, the UNDP and the EU’s support to the Lebanese environment, amounting to 12 million euros, is evidence of the growing importance of the Green Economy, and of Lebanon’s eagerness to promote such initiatives. In fact, green investments have reached more than 256 loans, amounting to around $500 million. They have effectively created 10,000 new jobs directly or indirectly, as a result of the growing number of companies working in this sector, in addition to the increasing number of projects in this field, and more importantly, the development of relevant fields of study.

Today, the BDL, in collaboration with the Ministry of the Environment, is striving to support the green economy further, and thus foster sustainable growth, by providing more financial mechanisms to the environmental sector, as it did with the energy sector through NEEREA. The BDL is also encouraging pollution abatement projects, in collaboration with the Ministry of the Environment, by providing very low cost of credit (around zero percent), and for periods ranging between seven and 10 years. The Lebanese banking sector is more than ready to support any sustainable national initiative with a green twist.

BDL

The green roof

The Green Roof is another project that the BDL itself pioneered, with the aim of promoting green spaces in urban areas, taking into account all the benefits that emanate from it. The Central Bank dedicated an area of 834 square meters in its main headquarters in Hamra, and launched its very own “Green Roof” on the 30th of June 2014, in cooperation with UNDP’s CEDRO project. By launching such an initiative, the BDL hopes that it will inspire other public and private institutions to follow in its footsteps, and promote more green spaces.

In addition, the BDL has been prompting the banking sector to respect and adopt international environmental standards for due diligence when granting loans, such as the “Equator Principles:” a risk management framework, for determining, assessing, and managing environmental and social risk in projects, intended to provide a minimum standard for due diligence to support responsible risk decision-making. Such endeavors fall within the umbrella of BDL’s Corporate Social Responsibility.