World Bank approves recovery funding for Iraq, Syria, and Lebanon

The largest allocation, totalling $930 million, has been approved for Iraq to modernise its railway network, stimulate domestic trade, create employment opportunities and support economic diversification. The Iraq Railways Extension and Modernisation Project is designed to enhance services and expand freight capacity along the key corridor between the southern port of Umm Qasr on the Arabian Gulf and the northern city of Mosul.

“As Iraq shifts from reconstruction to development, enhanced trade and connectivity can stimulate growth, create jobs, and reduce oil dependency,” said Jean-Christophe Carret, Director of the World Bank’s Middle East department.

In Lebanon, which is still reeling from last year’s devastating conflict, the World Bank has approved $250 million to support post-war reconstruction. The funds will go towards the urgent repair and rebuilding of damaged critical public infrastructure and essential services, as well as the sustainable management of rubble in areas affected by the conflict. The Bank previously estimated Lebanon’s reconstruction needs at approximately $11 billion.

Carret noted that the support was conceived as part of a broader framework: “Given Lebanon’s large reconstruction needs, the project is structured as a $1 billion scalable framework with an initial $250 million contribution from the World Bank.”

Lebanese Prime Minister Nawaf Salam welcomed the funding decision, describing the project as “a key step in reconstruction by responding to damage to critical infrastructure and essential services in war-affected areas.” He added that the support would “strengthen recovery efforts within the state-led implementation framework and leverage much-needed additional financing.”

More than a year of conflict with Israel, culminating in a full-scale assault launched in September and ending with a ceasefire in late November, left widespread destruction across Lebanon. The devastation was particularly severe in Hezbollah strongholds in the south and east of the country and in Beirut’s southern suburbs, compounding the economic crisis that has plagued Lebanon since 2019. Post-war reconstruction remains one of the government’s most pressing challenges, with Beirut actively seeking international assistance.

Meanwhile, the World Bank also approved a $146 million grant to Syria from the International Development Association to help restore electricity services and support the country’s economic recovery. The funds will be used to rehabilitate high-voltage transmission lines and transformer substations damaged during the war, and to procure spare parts and maintenance equipment.

“Among Syria’s urgent reconstruction needs, rehabilitating the electricity sector has emerged as a critical, no-regret investment that can improve the living conditions of the Syrian people,” Carret said. He added that restoring reliable power would “support the return of refugees and the internally-displaced, enable resumption of other services such as water and healthcare, and help kick-start economic recovery.”

The World Bank said the grant represents the first step in a planned increase in support to Syria as it embarks on a long road to recovery and development. Years of civil war, which began in 2011, have devastated Syria’s infrastructure, with the population enduring long daily power cuts. The grant follows announcements by Saudi Arabia and Qatar to settle Syria’s World Bank debt, as the country’s new leadership accelerates reconstruction efforts following the easing of Western sanctions. The United Nations estimates that rebuilding Syria will cost over $400 billion.

News.Az