VZCZCXRO6458
RR RUEHAG RUEHBC RUEHDE RUEHDF RUEHDH RUEHIK RUEHKUK RUEHLZ RUEHROV
RUEHSL RUEHSR
DE RUEHLB #0779/01 1950458
ZNR UUUUU ZZH
R 140458Z JUL 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 5310
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 BEIRUT 000779 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/ELA AND EEB/IFD/ODF 
STATE PASS USTR FRANCESCKI 
STATE PASS USAID LAUDATO/NANDY/SCOTT 
TREASURY FOR PARODI/BLEIWEISS/AHERN 
USDOC FOR 4520/ITA/MAC/ONE 
NSC FOR SHAPIRO/MCDERMOTT 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EIND ENRG PGOV LE
SUBJECT: LEBANON: OPIC/CITI EXTEND ADDITIONAL LOAN FACILITY TO 
BYBLOS BANK (ECONOMIC WEEK IN REVIEW, JULY 6 - 12, 2009) 
 
CONTENTS 
-------- 
 
-- OPIC/CITI EXTEND ADDITIONAL LOAN FACILITY TO BYBLOS BANK 
-- CENTRAL BANK FOREIGN CURRENCY ASSETS REACH RECORD HIGH 
-- MEGAPORTS PROJECT MOVING FORWARD 
-- CAPITAL INTELLIGENCE RAISES SOVERIGN AND BANK RATINGS 
-- LEBANON RANKS LOW ON WORLD BANK GOVERNANCE INDICATOR SURVEY 
 
 
OPIC/CITI EXTEND ADDITIONAL 
LOAN FACILITY TO BYBLOS BANK 
-------------------- 
 
¶1. (SBU) On July 10, Citi Country Officer for Lebanon Walter Siouffi 
told us that the Overseas Private Investment Corporation (OPIC) and 
Citi signed a $40 million 15-year term loan facility for Byblos Bank 
(one of Lebanon's top three commercial banks) this week.  This 
amount will be used for lending to small and medium-sized 
enterprises (SMEs), for mortgages, and for consumer finance in 
Lebanon, Armenia and Iraq, where Byblos Bank has a presence, Siouffi 
said.  This is the second time that Byblos has benefited from 
Citi/OPIC loan facilities as it received $50 million in April 2007. 
With this new agreement, Citi and OPIC have extended $260 million in 
term loan facilities (for up to 15 years) to selected commercial 
banks in Lebanon since January 2007. 
 
CENTRAL BANK FOREIGN CURRENCY 
ASSETS REACH RECORD HIGH 
-------------------- 
 
¶2. (U) The Central Bank of Lebanon's (CBL) foreign currency assets 
increased by 19% in the first half of 2009 reaching a record high of 
$23.5 billion.  Meanwhile, CBL gold reserves also increased by 7.8% 
in the same period, due to the rise in international gold prices, 
reaching $8.66 billion.  (Note:  Lebanon holds 9.22 million ounces 
of gold.  End note.) 
 
MEGAPORTS PROJECT 
MOVING FORWARD 
---------------- 
 
¶3. (SBU) A delegation from the U.S. Department of Energy (DOE) 
visited Beirut July 7-8 to follow-up on the Megaports project at the 
Port of Beirut.  The delegation met with GOL officials from Customs 
and the Port Authority, as well as the Chairman of the private 
operator of the container terminal, to discuss next steps in 
implementation of the project, including an engineering survey 
scheduled for mid-September.  The delegation also met with the PM's 
advisors and EU officials to discuss training and future 
cooperation, as the EU is involved with the GOL's land border 
control project.  The Megaports project is expected to become 
operational in March 2010. 
 
CAPITAL INTELLIGENCE RAISES 
SOVERIGN AND BANK RATINGS 
-------------------- 
 
¶4. (U) Credit rating agency Capital Intelligence (CI) raised 
Lebanon's long-term foreign and local currency ratings to B from B- 
and maintained its outlook at stable.  The agency attributed the 
upgrade to a decline in near-term financing risks and a decrease in 
political risk following the June parliamentary elections.  However, 
it noted that sovereign ratings remained constrained by weak public 
finances and political risk factors.  CI also raised its long-term 
foreign currency ratings of six major commercial banks in Lebanon. 
 
 
 
LEBANON RANKS LOW ON WORLD BANK 
GOVERNANCE INDICATOR SURVEY 
-------------------- 
 
¶5. (U) The World Bank's (WB) annual World Governance Indicators for 
2008 ranked Lebanon 146 out of 212 countries worldwide and 13 out of 
20 MENA countries, on six governance indicators.  Compared to the 
MENA region, Lebanon's rank remained unchanged on government 
effectiveness, political stability, voice and accountability, and 
 
BEIRUT 00000779  002 OF 002 
 
 
rule of law, while it regressed by one spot in regulatory quality 
and control of corruption.  Lebanon regressed significantly 
worldwide on the control of corruption indicator, falling by 17 
spots. 
 
SISON