BDL Financing Incentives
AGRO INVEST
‫تشجيع اإلبتكار في الصناعات الغذائية‬
Banque Du Liban
Financing Unit
The Tools

BDL stimulates financing investments in targeted
economic sectors either by

Interest Rate Subsidy scheme, or

Exempting banks from part of the required reserve
requirement, or

By providing banks with a soft loan to finance these
projects at low cost.

Interest Subsidy
Micro Credit
 Incentives 2009
 Environmental Loans
Incentives 2013

Interest Subsidy on Loans Extended to Productive
Economic Sectors

1.
2.
3.
4.
5.
Loans extended to local private sector projects in the industrial, touristic,
agricultural, IT development and handicrafts sectors benefit from a 4.5%
Lebanese Government interest subsidy rate, given the following conditions:
The project is in Lebanon.
The loan is used to finance a new project or the expansion of an existing one, with
a minimum value of LBP 50m or its equivalent (USD/€).
The term of the loan must range between 5 and 7 years.
The total value of subsidized loans granted to a single economic group, must not
exceed LBP 15bill or their equivalent, or an amount of LBP 60bill in case a
number of debtors are not considered as a single economic group for justified
economic and financial purposes.
Interest and commissions (before government subsidy) are as follows:
LBP: ≤ 2Yr. TBs. + 1% = 5.84% +1. % = 6.84%
FX : ≤ 3Mths. LIBOR (or Euribor) + 7%.
Interest Subsidy on Loans Guaranteed by Kafalat SAL

Loans guaranteed by Kafalat SAL and extended to SMEs in
productive economic sectors benefit from a 4.5% Lebanese
Government interest subsidy rate, given the following conditions:
1.
2.
3.
Conditions set by Kafalt SAL.
The term of the loan is up to 7 years, with a grace period ranging
between 6mths to 1 year.
Interest and commissions (before government subsidy) are as
follows:
LBP: ≤ 40%*(1Yr. TBs.) + 3% = (40% * 5.35%) + 3% = 5.14%
FX : ≤ 1Yr. LIBOR + 5.5%.

Interest Subsidy

Micro Credit
Incentives 2009
 Environmental Loans
Educational Loans
 Incentives 2013

Micro Credit

Loans
granted through micro credit institutions to
individuals and small enterprises employing four people or
less, in order to help them start or develop their business in
industrial, service, touristic or commercial sectors, provided
the following:
1.
2.
The loan amount does not exceed LBP 20 million.
Its repayment period does not exceed 5 years.
Interest Subsidy
 Micro Credit


Incentives 2009
Environmental Loans
Educational Loans
 Incentives 2013

Incentives 2009

This scheme started for loans granted since January 1, 2009 to finance
new projects or expand existing ones in the all economic sectors (except
real estate development), and will continue till December 31, 2013 ,
provided the following:
1.
They are not granted for the purpose of financing working capital
or refinancing existing projects or commitments.
2.
Grace period can range between six months to four years from the
disbursement date.
3.
The repayment of principal is up seven years starting from the end
of the grace period.
4.
Interest and commissions are as follows:
LBP: ≤ 40% * 1Yr. TBs. + 3% = 2.14% + 3% = 5.14%
FX : ≤ Cost of Funds + 2%.
Interest Subsidy
 Micro Credit
 Incentives 2009

Environmental
Educational Loans
Incentives 2013

Loans
Sectors that can benefit from the NEEREA mechanism








Industrial Sector,
Touristic Sector,
Agricultural Sector,
Commercial Sector,
Medical Sector,
Educational Sector,
Residential Projects (Buildings, Houses),
Other sectors…
Environmental Projects



Energy Related (NEEREA
Mechanism):
Any undertaking related to Energy
Saving and Renewable Energy.
Lighting, Ventilation systems,
Generators, Heating and Cooling,
Refrigeration, Furnaces, Boilers,
Solar Energy, Photovoltaic,
Biomass, Wind energy, Buildings
envelope.

Non-Energy Related:

Any project concerned with
pollution abatement, solid waste
and waste water treatment,
recycling.
Ecotourism, organic agriculture,
cladding and landscaping.

Environmental Projects

New Projects:

Repayment period up to 10
years, beginning after the end
of the grace period.
Grace period ranging from 6
months to 4 years.


Re-modeling Existing
Projects:

Repayment period up to 10
years, including the grace
period.
Grace period ranging from 6
months to 2 years.

Subsidized Interest Environmental Loans
During Interest
Subsidy Period
Interest + Commissions ≤
LBP : Rate on 2Yr. TBs. ≈ 5.84%
USD : LIBOR 3Mths. + 6% ≈ 6.28%
After Interest Subsidy Period
Interest + Commissions ≤
LBP : Rate on 2Yr. TBs. – 2.5% ≈ 3.34%
USD : LIBOR 3Mths. + 2.5% ≈ 2.78%
Non-Subsidized Environmental Loans
Energy Related
Interest + Commissions ≤
LBP: 3% - 50% (1Yr. TB. Yield) ≈ 0.325%
USD: Cost of Funds + 2% - 50% (1Yr. TB.
Yield)
Non-Energy Related
Interest + Commissions ≤
LBP: 3%
USD: Cost of Funds + 2%
Grant Contract Signed between BDL and EU
A grant contract was signed to support investments in sustainable
energy in the amount of €12,200,000. The Central Bank would, pay
a grant to subsidize loans extended to finance energy projects, with
a maximum amount of $5m. energy loans:
15%
5%
• Of the value of the non-subsidized energy related loan
• Of the value of subsidized energy related projects
• Funds are allocated to the project after BDL/EU Consultant
approves the technical study proposed.
BDL
• The grant money allocated would be disbursed upon final execution,
and after technical validation.
Interest Subsidy
 Micro Credit
 Incentives 2009
 Environmental Loans
 Educational Loans


Incentives 2013
Incentives 2013

A new stimulus package has been recently introduced by the
Central Bank, consisting of USD 1.46 billion in the form of soft
loans extended to Lebanese banks in order to boost lending activity
and fuel economic growth, provided the following general
conditions:






The Central Bank extends these loans at an interest rate of 1%.
Funds are allocated to banks on a first-come first-served basis.
Incentives are provided to support housing, education, renewable energy projects,
innovative projects, research & development ventures, entrepreneurship, and
various productive sectors of the economy.
The loan to the final beneficiary is used to finance a new project or the expansion
of an existing one.
Loans cannot be used to finance working capital expenditures or to finance
acquisitions of shares and participations in legal entities.
The 1% interest cost is to borne equally between the bank and the beneficiary.
Incentives 2013

Loans granted in LBP to entrepreneurs to finance new
projects in the field of knowledge and innovation:

The loan amount does not exceed LBP 300 million.
The borrower is granted a grace period of one to three years as
of the disbursement date.
The reimbursement period of the loan principal does not
exceed seven years, excluding the grace period.
All interest and commissions should not exceed 0.75%.



Incentives 2013

Loans granted in LBP to finance Research and
Development Ventures in productive sectors:

The borrower is granted a grace period of two to four years as
of the disbursement date.
The reimbursement period of the loan principal does not
exceed ten years, excluding the grace period.
All interest and commissions should not exceed 0.75%.


Incentives 2013
Financing Scheme
Loans from Banks
(Billion LBP)
Cost on Beneficiary
Multiplier
Loan from BDL
(Billion LBP)
Subsidized Loans
333
2 Yr. Tbs + 1.075%
LIBOR 3mths. + 7.075%
15%
50
Subsidized Loans –
Kafalat
166.7
40%*1Yr. Tb + 3.3%
60%
100
Total
500
150
Incentives 2013
Financing Scheme
Loans from Banks
(Billion LBP)
Cost on Beneficiary
Multiplier
‫المؤسسة العامة لإلسكان‬
600
20%*2 Yr. Tb + 3.9%
80%
480
‫جهاز إسكان العسكريين‬
80
2.128%
100%
80
‫قضاة‬
22
2.128%
100%
22
‫المهجرين‬
30
2.128%
100%
30
‫األمن العام‬
30
2.128%
100%
30
‫قوى االمن الداخلي‬
50
2.128%
100%
50
667
40%*1Yr. Tb + 3.3%
60%
400
Housing Loans –
Banque de L’Habitat
80
3%
100%
80
Total
1,559
Incentives
Housing
2009
-
Loan from BDL
(Billion LBP)
1,172
Incentives 2013
Loans from Banks
(Billion LBP)
Cost on Beneficiary
Multiplier
416.7
40%*1Yr. Tb + 3.3%
60%
250
Educational Loans
50
3.5%
100%
50
Research
Development
15
0.75%
150%
22.5
100%
10
150%
22.5
Financing Scheme
Incentives 2009
Non Housing
–
and
Micro Credit
Innovative
Ups
Total
10
Start-
15
506.7
0.75%
Loan from BDL
(Billion LBP)
355
Incentives 2013
Financing Scheme
Loans from Banks
(Billion LBP)
Cost on Beneficiary
Multiplier
EIB/AFD Energy
160
0% - 0.75%
150%
240
Energy Loans
150
3.75%- (50%*1Yr. Tbs )
150%
225
Solar Panels Loans
10
0.75%
150%
15
10
0.75%
150%
15
World Bank –
Pollution Abatement
23
WB rate + BDL Comm + 3.5%
Bank Spread - (100%*1Yr. Tbs)
100%
23
Environmental
Subsidized Loans
50
2 Yr. Tbs + 0.15%
30%
15
Total
403
533
Grand Total
2968.7
2,210
Solar
Energy
Rural Ares
–
Loan from BDL
(Billion LBP)
Thank You