Lebanon is seeking funds for reconstruction efforts seven months after a ceasefire that ended fighting between Israel and Hezbollah. This is significant because Lebanon likely needs large sums to rebuild areas damaged in its south and in its capital, Beirut. In March, the World Bank estimated that Lebanon would need around $11 billion for reconstruction.
Now, Arab News has reported, “Lebanon’s battered infrastructure and strained public services are set for a boost, as the World Bank has approved $250 million to launch a broader $1b. recovery and reconstruction initiative.” This is a lot less than the World Bank says the country needs.
In fact, in its 2025 report, the World Bank said, “Underpinning these needs estimates, the report assesses that the economic cost of the conflict on Lebanon is $14b., with damage to physical structures amounting to $6.8. and economic losses from reduced productivity, foregone revenues, and operating costs reaching $7.2b.”
At the time, the World Bank went on to note that “housing has been the hardest hit sector with damages estimated at $4.6b. The commerce, industry, and tourism sectors have also been significantly impacted, with losses estimated at $3.4b. across the entire country.
In terms of geographic scope, the Nabatiya and South governorates have been the most impacted, followed by Mount Lebanon (which includes the southern suburb of Beirut).”
Now, the World Bank is putting a small amount toward the overall goal. The report at Arab News says that the new funding has been approved via the Lebanon Emergency Assistance Project.
“The project follows a phased approach to address response, recovery, and reconstruction, focusing on prioritizing and sequencing interventions to achieve maximum economic and social impact in the shortest possible time.
“Considering the scale of needs, LEAP was designed to support [the] restoration of public infrastructure and buildings, given this is a precondition to economic and social recovery,” the World Bank release noted.
“The conflict has introduced another shock to Lebanon’s already crisis-ridden economy. While the economic contraction was anticipated to bottom out in 2023, following five years of sustained sharp contraction, the conflict and its spillovers have had negative knock-on effects on economic growth in 2023, continuing into 2024,” the report added.
Lebanon welcomes $250 million from World Bank
Lebanese Prime Minister Nawaf Salam said he welcomed “the World Bank Board’s approval of the $250m. Lebanon Emergency Assistance Project, which represents a key step toward reconstruction by addressing damage to critical infrastructure and essential services in areas affected by the conflict.”
Arab News noted that Jean-Christophe Carret, the World Bank’s Middle East department director, said: “Given Lebanon’s large reconstruction needs, LEAP is structured as a $1b. scalable framework with an initial $250m. contribution from the World Bank and the ability to efficiently absorb additional financing – whether grants or loans – under a unified, government-led implementation structure that emphasizes transparency, accountability, and results.”
This isn’t the end of the story, though. Hezbollah will want to try to find a way to play a role in reconstruction. It has benefited in the past by establishing organizations and companies that benefit.
Lebanese media Al Akhbar, considered to be pro-Hezbollah, said in a report on Thursday that the government of Lebanon appeared to be turning its back on reconstruction.
“The interesting question this debate raises is: Does the government want to begin reconstruction, or is it waiting for external ‘permission’ to do so?” asked the report.
“It’s worth remembering that Hezbollah has spent nearly $1b. so far on renovation and shelter work, but the government has not inquired about the situation of any displaced families.”