BETTING ON SUCCESS

Lebanon 2019 | ECONOMY | INTERVIEW

EBRD is actively exploring possible investments in Lebanon to directly support local companies, energy projects, and key sovereign projects.

Gretchen Biery \
BIOGRAPHY
Gretchen Biery has served as EBRD’s Head of Lebanon since 2018. Prior to this, she held strategic and operational positions in the multilateral development banks and US Treasury Department. She worked for the World Bank in several countries helping governments improve their financial management and service delivery capacity. She was also a political risk consultant advising multinational companies on energy investments and started her career in the US Congress advising on policy issues such as banking and energy. Biery has a master’s degree in international relations and economics from Johns Hopkins University SAIS and an undergraduate degree in international political science from the University of Louisville.

Can you give us an overview of the bank's presence globally and in Lebanon?

EBRD promotes the development of the private sector and entrepreneurial initiative in 38 economies across three continents. The bank is owned by 68 countries as well as the EU and the European Investment Bank (EIB). EBRD investments are aimed at making economies in their respective regions competitive, inclusive, well governed, green, resilient, and integrated. In 2018, EBRD financed 395 projects worth a total of EUR9.5 billion. The bank is well on its way to meeting a target of 40% of its annual investments to the green economy by 2020, up from its present share of 36%. Lebanon is EBRD's newest country of operation. Interestingly, EBRD's arrival in Lebanon coincided with a rather critical timing, both politically and economically, as the country faces macro and fiscal challenges that necessitate reforms. This is an important period for the Lebanese people and Lebanon's economy. The country is facing macro and fiscal challenges that necessitate reforms. This would ultimately allow Lebanon's high-capacity private sector to grow and help the people of Lebanon who have been greatly impacted by a period of slow economic growth. The EBRD's investments aim to help the Lebanese economy. We have come at the right time. We will focus on the private sector, but we see a useful role for our institution helping the government with core infrastructure to provide lasting benefits to the country.

What is your involvement on the front of the green economy and the energy sector?

Energy and the green economy are one of our main priorities in the country. In 2018, we closed our first corporate deal with a private electricity distribution services provider. In 2018, we invested in the first green bond in Lebanon with a partner bank and also introduced a program called the Green Economy Financing Facility with a USD100-million loan that provides financing through a local partner bank to invest in and incentivize the use of energy-efficient technologies and renewable energies. Besides green financing, we are actively exploring key sovereign projects and PPPs, including for renewable energy as well as core infrastructure to improve the provision of electricity. We helped the government develop the first bankable PPA and will provide technical assistance to help develop the tenders for the upcoming solar plus storage tender for around 300MW. We also intend to assist the government with the tender for the second round of wind farms. Another interesting upcoming area of work will be a pre-feasibility study on the potential for a solar PV project in the Tufail region. Following previous work done by the American University of Beirut (AUB) that identified the potential for solar PV capacity in this region, EBRD decided to fund a study to assess the feasibility of such a project. We are still in the early stages, though we are hopeful of positive outcomes.

What is your commitment to support SMEs?

According to the World Bank, SMEs account for 97% of the Lebanese economy. Due to the high interest rates on deposits, SMEs all across the country experience difficulties in accessing financing, which in turn negatively impacts the economy. We have made SMEs one of our areas of focus through a multi-prong strategy. The first component is providing a SME credit line through local banks, which directly provides financing for local SMEs. The second component is an EU-funded advisory program called Advice for Small Business, whereby through a cost-sharing arrangement, we connect SMEs to local or international consultants to provide them advice on issues such as marketing strategies or accessing a foreign market. The cost-share model ensures a stronger commitment to the ultimate outcome on all sides. We can also directly finance larger SMEs. Finally, from a broader perspective, we will support SMEs by investing in the infrastructure, primarily in the transport and electricity sectors, which represent important preconditions to a healthy business environment.