The GNC Energy Committee has reviewed the cabinet’s decree permitting the Ministry of Electricity and Renewable Energies, and the Ministry of Oil and Gas, to take out loans from commercial banks.
Libya Herald reports that taking out commercial loans to finance state projects, although rare, is not a totally new step by government bodies in Libya, and he Libyan banking sector has indicated it is willing to lend to the state. Gumhouria Bank, for example, led a consortium in financing state-owned Libyan Airlines’ purchase of 14 Airbus aircraft.
Industry Minister Suleiman al-Fitouri [Suleiman Ali Al-Fitory, Sulaiman Ali Al-Lteef Al-Fituri] (pictured) recently said that the industrial sector must play an important role in the diversification of Libya’s economy by bringing added value, and added that he saw a major role for the banking sector, Libyan and foreign, in this process.
Libyan banks have been criticized for sitting on pools of cash and leaving the economy hungry for financial support, but the Gumhouria Bank chairman, Musbah Akkari, told Libya Herald:
“Where there are adequate guarantees, we are very happy to lend. We have initiated discussions with various ministries, for example the Ministry of Housing to propose loans and projects in the housing sector as well as the Ministry of Economy to propose loans for SME projects and to help the unemployed and for development up to half a billion dinars.
“We have also made proposals for loans to the Ministry of Electricity for three solar power stations ...
"The Libyan banking sector can provide loans of up to LD 100 bn ... This can go up to LD 400 bn with leverage.”
(Source: Libya Herald)