The spending of Lebanese citizens on water constitutes 1 percent of the national income, equivalent to $306 million, and has the ability to increase with the growth in GDP, said central bank Governor Riad Salameh Tuesday citing World Bank statistics.


“This includes spending on water consumption by individuals, households, schools, hospitals and hotels,” Salameh said.


Salameh noted that if the water sector is well organized, its value could reach $5 billion to $6 billion to be added to the national wealth.


His remarks came during a workshop launched at Habtoor Hotel to tackle the involvement of the private sector in water infrastructure in Lebanon.


Salameh expressed a sense of perturbation that water has reached the dryness stage.


However, he explained, in spite of such a critical situation of water, it can still be a vital economic and financial resource of no less importance than fuel, if appropriately managed.


He noted that the central bank is aware of the importance of funding environmentally friendly projects at low costs in Lebanon. Therefore, he added, Banque Du Liban (BDL) encouraged banks to provide low interest loans for such projects through the central bank’s cancellation of obligatory reserves that were previously imposed on banks.


“This will encourage investors to ask banks for more loans for the implementation of such projects. Moreover, it will boost the economic activity in the country,” he said.


“The central bank encouraged as well the funding of renovating old projects in a way that would turn them into environmentally friendly ones in addition to supporting productive projects,” he added.


Salameh said the environmentally friendly projects that are supported by the central bank include “ecotourism, organic agriculture, waste management, recycling and water treatment and sanitation.”

He said BDL encourages banks to form “socially responsible funds” aime at investing in projects that will preserve water and environment resources. “This is what foreign banks usually do,” he said.


“Banks can also fund water projects through public-private partnerships … They can also provide funding through BOT which will increase productivity and create more job opportunities for the Lebanese youth,” he said.


“The major challenge here is to be highly aware of the political risks of reform in the water sector in Lebanon and be at the same time capable of reforming this sector in a way that best serves the Lebanese,” he said.


Energy and Water Minister Jibran Bassil delivered a word on the occasion, noting the dire need for water as a natural resource that should take priority above any commercial deal.


He hoped a round-table session would be held to survey the impasse of the water sector.


He said the government’s losses from water are huge and the institutions that had been established during 2005 for finding solutions to this problem are suffering from great financial and human-resource losses.


“The current situation requires a fast solution despite the fact that we have seen the partnership between the public and the private sectors failing in Tripoli,” he added.


For his part, secretary general of the higher council for privatization Ziad Hayek said the partnership with the private sector thorough BOT contracts is essential in such a domain.


“We should be pragmatic when using our financial, operational and administrative means,” he said.

The Daily Star