Germany is to present a multibillion-dollar proposal to rebuild the Port of Beirut as part of efforts to entice Lebanon’s politicians to form a government capable of warding off financial collapse.
A chemical explosion at the port in August killed 200 people, injured thousands and destroyed entire neighbourhoods, plunging the country deeper into its worst crisis since the 1975-1990 civil war.
According to two diplomatic sources with knowledge of the plans, Germany and France are vying to lead reconstruction efforts.
Berlin will on April 7 outline a proposal the European Investment Bank has agreed to help fund that would clear the area and reconstruct facilities, they said.
One of the sources estimated EIB funding in the range of 2 billion ($AU3.09 billion) to 3 billion euros.
A senior Lebanese official confirmed Germany was due to present a comprehensive reconstruction proposal.
Neither the German foreign ministry nor consultancy firm Roland Berger, which the diplomatic sources said put the plan together, immediately responded to requests for comment.
The two diplomatic sources said Lebanon’s political elite first need to agree on the make-up of a new government to fix public finances and root out corruption.
The condition is one donors, including the International Monetary Fund, are also insisting on before they unlock billions in aid.
“This plan is not going to come without strings attached,” said one of the sources.
“Germany and France want first to see a government in place committed to implementing reforms. There is no other way around it and this is good for Lebanon.”
Eight months after the port disaster, many Lebanese who lost family, homes and businesses are still waiting for the results of an investigation into the causes.
Lebanon is on the verge of collapse, with shoppers brawling over goods, protesters blocking roads and businesses shuttered.
Foreign donors say the new government must have a firm mandate to implement economic reforms, including a central bank audit and overhaul of the wasteful power sector.
Prime Minister-designate Saad al-Hariri and President Michel Aoun have been unable to agree a ministerial line-up, however.
The outgoing cabinet, which quit after the explosion, has stayed on in a caretaker capacity.
The IMF has said there have been no program discussions with Lebanese officials, only technical assistance with the Ministry of Finance and some state-owned enterprises.
In addition to the port, Germany’s proposal would look to redevelop more than 100 hectares in the surrounding area in a project along the lines of the post-war reconstruction of central Beirut.