WASHINGTON (Reuters) - The World Bank on Friday said it had cancelled $244 million in undisbursed funds for the Bisri Dam project in Lebanon after repeatedly raising concerns about the project since January.
In a statement, the World Bank said it had notified the Lebanese government about its decision, which takes effect immediately. It said it has also repeatedly underscored the need for “an open, transparent and inclusive consultative process.”
The World Bank began raising concerns in January about Lebanon’s plans to build the large dam in the Bisri Valley, and put funding for the program under partial suspension on June 26.
Initially approved by Lebanon’s government in 2015 at a total cost of $617 million, the dam had long sparked criticism from environmental activists. Concerns about large infrastructure projects have spiked since the massive port explosion in Beirut on Aug. 4 that killed more than 190 people.
The World Bank committed $474 million to fund the project, of which $244 million have not yet been disbursed.
The Bank initially set July 22 as the deadline for authorities to meet all requirements to proceed with the project, but later agreed to extend the deadline until Sept. 4, given constraints imposed by the novel coronavirus pandemic.
The Bank said the Lebanese government had failed to address questions about an ecological compensation plan and arrangements for operations and management of the dam. The contractor also had not been mobilized at the site, it said.
Certain expenditures related to fiduciary and environmental and social safeguards would remain exempt, it said.
The Bank said it remained ready to work with Lebanese authorities to see how existing loans, including undisbursed amounts from the canceled Bisri project, could be used most effectively to respond to the emerging needs of the Lebanese people following the port explosion.
Reporting by Andrea Shalal; Editing by Sandra Maler and Aurora Ellis
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