UAE grants 300 million dollar loan to Lebanon


"We signed today the first agreement within the Paris III conference, and it stipulated a 300 million dollar assistance from the United Arab Emirates," Finance Minister Jihad Azour said Tuesday.

Lebanon secured pledges for over 7.6 billion dollars from international donors at a conference in Paris last month.

Lebanon’s has a huge public debt which ballooned to 41 billion dollars — more than 180 percent of gross domestic product — after a devastating Israeli military offensive last year.

Azour said the 20-year soft loan will have an interest rate of 2.5 percent and a grace period of five years.

"The sum will be used to help decrease public debt," he said.

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, the United States and the European Union, whose aid was offered to haul Lebanon back from the verge of financial meltdown and to show support for its embattled Western-backed government.

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.

But members of the Iran- and Syria-backed opposition have blasted the plan, approved on January 4 by Siniora’s rump cabinet which was deserted by six pro-Syrian ministers in November.

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