Cedre Local Group Meeting

CEDRE LOCAL GROUP MEETING

May 18, 2020 Grand Serail, Beirut, Lebanon AGENDA

Remarks by H.E. the Prime Minister

Remarks by H.E. the Deputy Prime Minister

Remarks by H.E. the Ambassador of France

Remarks by H.E. the French Inter-Ministerial Delegate for the Mediterranean

CEDRE Update

Electricity Sector Update

Anti-Corruption Strategy Update

Open Discussion CEDRE UPDATE

GoL Development Framework

CEDRE Follow-Up Mechanism

CIP & Sectoral Reforms

Structural Reforms

Productive Sectors GoL DEVELOPMENT PLANNING FRAMEWORK | TOOLS Today’s meeting complements ongoing discussions on the government’s reform and development priorities; with a specific focus on CEDRE commitments

COVID Financial Reform Infrastructure & Governance Response Utilities

CEDRE CEDRE GoL Economic Reform Plan (CIP & Sectoral Reforms) Cabinet Policy Statement

UPCOMING MEETING TODAY’S FOCUS TODAY’S FOCUS Productive Social Policies Environment

GoL COVID-19 Sectors Development Response Plan; MoSA Plan MoI, MoA, & MoT Plans National Social Solidarity Program (NSSP) MoE Plan UN & Partners Emergency Social Safety Net Program (ESSN) Appeal CEDRE - Lebanon Economic Social Protection Policy CEDRE Vision MoL Plan Waste Management Strategy UPCOMING MEETING COVERED EARLIER COVERED EARLIER COVERED EARLIER CEDRE FRAMEWORK What follows shall cover updates and next steps across all CEDRE focus areas: the follow-up mechanism, CIP project reprioritization and sectoral reforms, structural reforms, and productive sectors Follow-up Mechanism Structural Reforms Set-up of a project management secretariat and implementation of a monitoring and tracking system at Fighting Fiscal Capital Market the Project Management Unit in the PM office. Corruption Governance Reforms Follow-up mechanisms activated & tracking system set up Public Digital Doing Business CIP & Sectoral Reforms Procurement Transformation Environment

Public Sector Transparency in Electricity Water Judicial Reforms Modernization Oil & Gas

Solid Waste Reforms Underway; Telecom Fiscal Reforms updated; within the context of the Economic Reform Plan

Tourism & Productive Sectors Wastewater Transport Industry Development and implementation of the Lebanon Economic CIP reprioritization currently underway; Vision (McKinsey Plan) Sectoral Reforms underway Plans presented under the GoL 3-Yr. Development Priorities CEDRE UPDATE

GoL Development Framework

CEDRE Follow-Up Mechanism

CIP & Sectoral Reforms

Structural Reforms

Productive Sectors FOLLOW-UP MECHANISM | OVERVIEW 1 The GoL is activating the CEDRE follow-up mechanism, previously agreed upon between the GoLand donors, in order to push forward on its commitments Local Group Inter-Ministerial Committee GoL-Donor Group oversees Strategic Group Coordinates cross- government progress at the local level GoL-Donor Group oversees implementation First meeting held today progress at the capital level

Dedicated Monitoring Website Monitors progress across both projects and reforms and tracks funding FOLLOW-UP MECHANISM | INTER-MINISTERIAL COMMITTEE 1 In order to ensure adequate cross-government implementation of both projects and reforms, the GoL has established an inter-ministerial committee, whose secretariat is positioned within the Prime Minister’s Office

MEMBERSHIP MODUS OPERANDI

 Prime Minster  Technical secretariat, positioned at the PMO to provide  Deputy Prime Minister implementation coordination and progress tracking support; secretariat shall also support the local group by  Minister of Finance organizing & following-up on meetings, and coordinating  Minister of Economy and Trade with donors, civil society, & private sector  Minister of Industry  Minister of Environment  Decree issued by CoMROLEXXXXX  Minister of Public Works  Coordinate and track implementation of reforms and project implementation  Manage the reform tracking database Additional ministries & institutions might be mobilized as relevant, on a per need basis  Oversee the project and funding tracking platform FOLLOW-UP MECHANISM | LOCAL GROUP 1 Today’s meeting is the first for the local group, which shall meet on a quarterly basis to discuss project and reforms progress

MEMBERSHIP MODUS OPERANDI PRESIDENCY  Quarterly Meetings Co-chaired by the PM & Ambassador of France  Supported by the Inter-ministerial Committee’s technical secretariat  The government commits to organize regular meetings with private MEMBERS sector & civil society representatives, as well as relevant parliamentary AFESD EBRD EIB committees, and adopt a participatory approach throughout. IDB UNRCO World Bank  An int’l audit firm shall be retained for non-MDB funded projects to ensure transparent & efficient procurement & implementation. EU France Germany  Public audit bodies shall be activated in parallel. Italy Kuwait Netherlands Qatar Saudi Arabia Spain ROLE United Kingdom United States of America  Oversee project implementation progress and associated sectoral reforms, oversee structural reforms; flag challenges  Follow up on donor funding disbursement for CIP projects PRIVATE SECTOR & CIVIL SOCIETY REPRESENTATION  Identify capacity-building needs FOLLOW-UP MECHANISM | STRATEGIC GROUP 1 The Government aims at holding the first strategic group meeting by Q4 2020, and shall shortly proceed with the preparation of its first progress report

MEMBERSHIP MODUS OPERANDI

AFESD Arab Monetary Fund Asian DB  Annual Meetings, co-chaired by GoL & host capital EBRD EIB IFC  Meetings held based on regular reports jointly prepared by the IMF IDB UNRCO GoL, WB, IMF and UNRCO World Bank Canada China  An int’l audit firm shall be retained for non-MDB funded projects Egypt EU France to ensure transparent & efficient procurement & implementation Germany Italy Japan Kuwait Netherlands Norway ROLE Qatar Saudi Arabia Spain Sweden Switzerland Turkey  Focus on structural and sectoral reforms, including those in the UAE UK USA cabinet policy statement  Close monitoring of the economic and financial situation PRIVATE SECTOR & CIVIL SOCIETY REPRESENTATION  Roadmap setting  Follow up on implementation of the McKinsey recommendations FOLLOW-UP MECHANISM | TRACKING PLATFORMS 1 A reform tracking database is currently being managed by the PMO while the project dashboard shall go live by June; information on both dashboards shall be made public on both the PCM website

REFORMS PROJECT PUBLIC ONLINE DASHBOARD DASHBOARD INTERFACE

Tracks sectoral & structural Tracks project implementation and Provides public access to reforms. Also includes cabinet funding flows information based on both the policy statement commitments. reforms and project dashboard

Housed & Operated by the PMO Housed & Operated by the CDR Housed & Operated by the PMO Overseen by the PMO

Already activated To go live by June 2020 To go live by Q3 2020 FOLLOW-UP MECHANISM | PROJECT DASHBOARD 1 Funded by the EU and developed through the Technical Assistance Facility Crown Agents with Arabia GIZ; the CDR web reporting tool shall track funding and implementation status of CEDRE projects. CEDRE UPDATE

GoL Development Framework

CEDRE Follow-Up Mechanism

CIP & Sectoral Reforms

Structural Reforms

Productive Sectors CIP PROJECTS | REPRIORITIZATION CIP projects have been reprioritized and rephased, leading to a total of 138 projects instead of the initial 285, and 12 a total budget of USD 8.233 BN, in lieu of USD 22.94 BN. The CIP now extends over 10 years instead of 12… Prioritization criteria 6 1.946 Electricity 18 5.592 projects USD BN projects USD BN URGENCY Relevance to delivery of key public services 75 1.559 Water & Irrigation 124 4.845 projects USD BN projects USD BN IMPACT ON FISCAL POSITION 25 1.074 expenditure and revenue consolidation Wastewater 82 2.682 projects USD BN projects USD BN IMPACT ON ENABLING ENVIRONMENT 4 1.615 for doing business & job creation Transport 24 7.381 projects USD BN projects USD BN IMPACT ON LIVELIHOODS 11 0.72 Impact on poverty levels Telecom 10 0.7 projects USD BN projects USD BN EASE OF IMPLEMENTATION 15 0.144 Culture & Industry 26 0.339 Probability & feasibility of project implementation projects USD BN projects USD BN OPERATIONAL SUSTAINABILITY Ability to cover operating expenses, and ensure Environment 1 1.4 1 1.4 project USD BN project USD BN sustainable management CIP PROJECTS | REPRIORITIZATION … following this first round of reprioritization, sector level working groups shall be organized to develop sectoral 2 plans including reforms, projects and technical support needed. Plans shall then be raised to the CoM

1 Sectoral Working Group • Discuss projects related to the sector, reprioritize and phase them 2 Council of Ministers

• Discuss and provide updates on • Discuss plan sent by Sectoral relevant the sectoral and structural Working Group 3 Parliament reforms • Raise plan to parliament after • Discuss sectoral plan and ratify it • Discuss technical assistance approval through relevant legislation requirements and raise challenges

• Develop sector plan including reforms, projects technical assistance requirements and raise it to the CoM CEDRE in the Government’s Reform Plan 12 The CIP is a core part of the Government’s reform plan, which accounts for a minimum of USD 6.4 BN of CEDRE committed financing to be disbursed over a period of 10 years starting in 2021

MINIMUM EXPECTED CEDRE DISBURSEMENTS (in US$ billion, excl. grants)

in % of GDP: 0.0% 1.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

0.7 0.7 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.3 - -

2019E 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F  The Government’s Financial Recovery Plan takes into account minimum CEDRE funds disbursements worth 0% of GDP in 2020, 1% of GDP in 2021 and 2% of GDP from 2022 onwards, representing c. 60% of total CEDRE committed financing spread over a period of 10 years o These conservative assumptions reflect the prudent approach adopted by Government while designing its reform plan, but the annual disbursement figures could be revised upwards should the implementation of the Government’s CEDRE commitments remain on track and taking into account the budget’s capital expenditure absorption capacity  The CEDRE-related capital expenditures are expected to be highly beneficial to the country’s economy o Support the recovery path in the short-term: CEDRE-related CAPEX will help the economy recover by reducing unemployment, increasing consumption and thus providing a much-needed stimulus to the economic activity o Strengthen the long-term growth potential: CEDRE funds will have a lasting positive impact on the country’s growth potential by developing and modernizing the country’s infrastructure and strengthening the country’s competitiveness through investments in transportations, electricity, telecom, water and waste treatment SECTORAL REFORMS | ELECTRICITY 12 The electricity sector is at the forefront of GoL priorities; a detailed sector update is included in the second part of today’s presentation Power Generation FSRUs • G2G negotiations ongoing • Negotiations with Qatar Petroleum/ENI have started. Expected delays due to recent crisis.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Electricity Regulatory Authority EDL Board of Directors

• Law 462/2002 amendments currently being discussed within • MoEW officially launched the process for appointing EdL a dedicated inter-ministerial committee Board members on 23 March 2020

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

CEDRE Part of the GoL CEDRE commitment Completed 100 D Part of the GoL Cabinet Policy Statement 100-Day commitment On Track/ Minor Delays 1 Yr. Part of the GoL Cabinet Policy Statement 1-Year commitment Delays/ Minor Change in Scope 3 Yr. Part of the GoL Cabinet Policy Statement 3-Year commitment On Hold/ Major Delays/ Change in Scope SECTORAL REFORMS 12 The GoL is also actively pushing through on reforms across other sectors including Water, Solid Waste Management, Civil Aviation, and Telecom Water Solid Waste Management

• National Water and Wastewater Sector Strategy: developed by the • Framework law on integrated solid waste management ratified in MoEW; shall be submitted to the CoM by end of May (100D). 2018. Implementing decrees under development by MoE. • Water Code: MoEW currently developing the relevant • Draft decree for the creation of the solid waste management implementation decrees (1Yr.). administration also under development by MoE.

CEDRE 100 D 1 Yr. CEDRE 100 D 1 Yr.

Civil Aviation Telecommunications

• Nomination of regulatory body for Civil Aviation still pending. • New Telecom Sector policy: draft revision of law 431 to be raised to the CoM by Nov 2020; nomination of Telecom Regulatory Authority to follow. • Process launched for direct government management of mobile networks. CEDRE 100 D 1 Yr. CEDRE 100 D 1 Yr.

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope CEDRE UPDATE

GoL Development Framework

CEDRE Follow-Up Mechanism

CIP & Sectoral Reforms

Structural Reforms

Productive Sectors STRUCTURAL REFORMS | ANTI-CORRUPTION 4 In line with its policy statement & CEDRE commitments, the GoL is proceeding on the development and issuance of anti-corruption legislation Access to Whistleblower Anti-Corruption Information Protection Strategy Law passed in 2017; imp. decree drafts Law passed in 2018. Approved on May 12, 2020 by the yet to be developed and raised by the CoM. Ministry of Justice to the CoM. National action plan for law implementation developed and approved by technical inter-ministerial committee.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Note: Anti-Corruption subcommittee: parliamentary sub-committee established to review anti-corruption related draft laws; part of the Justice and Administration Committee. Committee chaired by MP Adwan; Sub-Committee chaired by MP Kanaan

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope STRUCTURAL REFORMS | ANTI-CORRUPTION 4 In line with its policy statement & CEDRE commitments, the GoL is proceeding on the development and issuance of anti-corruption legislation

National Anti-Corruption Illicit Enrichment Agency Draft law finalized by anti-corruption subcommittee. Also covers disclosure of Law passed by parliament. financial & interest statements. Ready for submission on the plenary session.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Recovery of Stolen Public Banking Secrecy Funds Under discussion by the anti-corruption sub- Law finalized by anti-corruption subcommittee. committee. Ready for submission.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope STRUCTURAL REFORMS | PROCUREMENT 4 The public procurement law is currently pending review with the budget and finance committee

Public Procurement

Draft law referred from the Administration and Justice committee to the Budget and Finance Committee; pending review.

CEDRE 100 D 1 Yr. 3 Yr.

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope STRUCTURAL REFORMS | JUDICIAL REFORM 4 The government is also advancing on judicial reforms, and expanding beyond its CEDRE commitments, to penal reforms, and prison management policies

Independence of the Alternative Punitive Judiciary Sanctions Justice & Administration committee MoJ currently developing a technical currently developing draft law based on feasibility study on electronic bracelets several previously presented versions. in coordination with the French Ministry Draft incorporates recently issued of Justice. circular on the development of a general penal policy.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope STRUCTURAL REFORMS | DIGITAL TRANSFORMATION & 4 PUBLIC SECTOR MODERNIZATION Modernization & Restructuring of the Public Administration Digital In 2017, law 46 on public sector modernization passed by Parliament. Transformation Inter-ministerial committee then established in 2017 to support implementation. Strategy Freezing public sector employment CEDRE 100 D 1 Yr. 3 Yr.

Unified Public Sector Social Benefits System CEDRE 100 D 1 Yr. 3 Yr. Digital Transformation Strategy and its corresponding executive Revising the gov’t subsidy policies CEDRE 100 D 1 Yr. 3 Yr. program.

Rationalizing Fuel Expenditures CEDRE 100 D 1 Yr. 1 Yr.

Public Sector Performance Management CEDRE 100 D 1 Yr. 3 Yr.

CEDRE 100 D 1 Yr. 3 Yr. Restructuring/Dissolving Public Entities CEDRE 100 D 1 Yr. 3 Yr.

2020 2021 Appointment of Combatting Tax Budget Budget BDL Vice- Evasion As part of its fiscal The GoL is committed to Governors, Beirut Draft law to combat tax consolidation effort, the MoF passing within institutional Bourse, & Banking evasion and tighten penalties is currently reviewing 2020 deadlines, and in line with Control Commission for smuggling referred to expenditures and revenue the guidelines set out in the parliament. projections, which will include economic recovery plan. Preliminary nominations freezing unnecessary presented by the MoF, investment spending, currently under discussion by cancelling/merging public the CoM. institutions and supporting exports.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope STRUCTURAL REFORMS | FISCAL GOVERNANCE 4 The government is committed to improve its fiscal governance framework, including following up on the issuance of key legislative pieces that would lead to better management of public finances Global Income Tax Law Modernization of Land Straightening Fiscal Law submitted by MoF and approved by CoM. Administration System Governance Expected to be ratified by parliament by Mid- Currently on hold USD50M WB program approved by CoM in 2020. 2018 and referred to Parliament. USD6MN advance agreement approved by the plenary session in 2018. CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Customs Reforms Privatization Law for Illicit Maritime Draft for customs reforms strategy finalized by Currently on hold Properties the Higher Customs Council in Jan 2019. Draft Proposal currently under revision by the customs law under development by MoF. CoM relevant ministries approved in Oct 2019 the decree proposed by MoF to install scanners at borders.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope STRUCTURAL REFORMS | DOING BUSINESS ENVIRONMENT 4

KEY REGULATORY REFORMS Secured Lending Approved by CoM; under review by Parliament Modernized Codes of Commerce issued Code of CEDRE 100 D 1 Yr. 3 Yr. Commerce by Parliament in Apr. 2019 Insolvency Law & Approved by CoM; under review by CEDRE 100 D 1 Yr. 3 Yr. Insolvency Parliament Practitioners Judicial Mediation Law issued in Oct 2018.Committee CEDRE 100 D 1 Yr. 3 Yr. headed by MoJ formed and drafted implementing decrees Competition Law Approved by CoM; under review by Parliament CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr. E-Transactions Law issued in October 2018 – Ministerial communication formed in May 2019 to Private Equity Fund Approved by CoM; reviewed by draft implementation decrees Parliament

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope STRUCTURAL REFORMS | TRANSPARENCY IN OIL & GAS 4

Enhancing Transparency LPA Board

• Law on enhancing transparency in the Petroleum Sector ratified by parliament in 2018. • Renewal / Appointment of LPA Board pending Shura Council feedback. • MoEW to draft relevant implementation decrees.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Sovereign Wealth Fund Second Oil & Gas Licensing Round

• Sovereign wealth fund law currently being discussed at the • MoEW to proceed on the second Oil & Gas Licensing relevant parliamentary sub-committee. Round.

CEDRE 100 D 1 Yr. 3 Yr. CEDRE 100 D 1 Yr. 3 Yr.

Completed On Track/Minor Delays Delays/ Minor Change in Scope On Hold/ Major Delays/ Change in scope CEDRE UPDATE

GoL Development Framework

CEDRE Follow-Up Mechanism

CIP & Sectoral Reforms

Structural Reforms

Productive Sectors PRODUCTIVE SECTORS DEVELOPMENT 5 The GoL is currently reviewing the Lebanon Economic Vision in the context of current socio-economic developments; short-term industry, agriculture, and tourism sector plans have also been developed by respective ministries LEBANON ECONOMIC VISION CEDRE 100 D 1 Yr.

Agriculture Apply modern technologies to improve yield; focus on Financial Build an investment management and offshoring hub. high value crops; facilitate access to international Services Develop centers of excellence in niches like fintech, markets; legalize cannabis cultivation for medical actuarial studies, analytics etc. purposes.

Industry Prioritize high-potential subsectors: food-processing, Knowledge Become a global digital producer, digitize government, high-end products w/ creative design (jewelry, cosmetics, Economy etc.), industries related to reconstruction in Syria, capture the regional market for high value added BPO healthcare and pharma. Develop national integrated services, become a regional creative hub, become an industrial parks educational hub

Tourism Build distinctive core offerings in “City & Entertainment”, Diaspora Prepare and organize the export of Lebanese talent. “Sun & Sea” and “Culture”. Develop Eco-tourism. Engage more with the diaspora. Proactively approach Expand the business meeting and incentives offering. the diaspora with investment opportunities. Establish a Promote medical tourism. diaspora advisory board to lobby for Lebanon’s interests in global forums. ELECTRICITY SECTOR UPDATE MoEW | Electricity Sector Presentation | May 2020 |

PART I Electricity Supply in Lebanon

PART II Selaata Land Options Evaluation

33 MoEW | Electricity Sector Presentation | May 2020 |

PART I Electricity Supply in Lebanon  General Overview

 Current Deficit & Its Causes

 Proposed Solutions • Short Term Vision • Permanent & Temporary Plants • Procurement Schemes • Renewable Energy 34 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions

After Before

35 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions

Energy Deficit Fiscal Deficit

Maximum Power Generation = 2,200 MW Average Selling Rate = 9.2 USC/KWH Total Yearly Income 900 MUSD (15,000 GWH / Year) (138 LL/KWH)

Average Consumed Energy Cost = 20 USC/KWH (300 LL/KWH)

Maximum Demand = 3,600 MW Average Collected Energy Cost = 25 USC/KWH Total Yearly Expenses 2,500 MUSD (24,000 GWH / Year) (375 LL/KWH) Average Supply = Yearly Deficit = 15/24 Hours 1,600 MUSD

36 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions

Low High Revenues Costs Eliminate Tariff EDL Deficit Increase

Investments 24/24 in the Electricity Sector Supply

37 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions

No new PPs, Improve TL & NTL + Renewables, Treasury Adv. Limits

5,000 20 20

4,500 18 18 4,000 16 16 14 14 3,500 14 14 14 3,000 12 14

2,500 10 12 11 7 2,000 8 10 1,500 6 9 4 4 1,000 4 8 7

500 1 1 2 6 6 0 0 4 4 2019 2020 2021 2022 2023 2024 2025 4 Installed Capacity (others) Powerships New Renewables (Hydro + Wind + PV) Temporary Solution 2 1 1 Deir Ammar II (open cycle) Deir Ammar II (Steam turbine) CCGT (open cycle) CCGT (steam turbine) 0 New Zouk New Jieh 2019 2020 2021 2022 2023 2024 2025 Demand (incl. Losses) Supply hours

Brent 64 30 40 40 50 50 50 Supply hours @ $50/Barrel Supply hours @ $40/Barrel Supply hours @ $30/Barrel 38 Fuel (B$) 1.6 0.8 0.5 0 0 0 0 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions

Electrical Sector Short Term Vision & Goals  Improve governance: new board of directors, regulatory authority, and applicable law 462.

 Achieve around 600 MUSD net savings in fuel purchases in one year by hedging Expected in 2022 contracts on the basis of considering a price of 30 USD/oil barrel. Deir Amar & Zahrani Fuel Cost  Achieve around 70 MUSD savings in the first year by reducing the losses by 5% and (6,000 GWH / Year – 1 to 1.2 BCM/Year) improving the collections by 2%. $800 $750 $700 $650 $600  Achieve additional revenues in the first year by adjusting the tariff as needed to meet $550 $500 the budget requirements. $450 $400 $350 $300  Achieve around 130 MUSD savings in the first year by supplying the existing plants $250 $324

Yearly Yearly Cost Fuel $200 $275 $150 $227 with natural gas through two FSRU stations on the basis of of 30 USD/oil barrel $100 $178 $50 $131 (without considering Deir Amar 2, Zahrani 2 and Selaata plants). $0 $30 $40 $50 $60 $70 Brent Price/Barrel  Work calmly on building the new power plants through the financing schemes that will be elaborated subsequent to the governments’ administration of loans Savings DO Cost NG Cost repayment and driving the economy. MUSD MUSD MUSD

 Reinstatement of trust in EdL that will allow formation of future partnerships to 39 achieve increased development. MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions

Power Plants as per updated policy

Permanent Plants Brief Description Deir Amar T. Deir Amar 2 (550 MW) Tri-Fuel CCGT + Complete BoP + GIS Switchgear 500 MW Deir Amar CCGT 550 MW Selaata 1 (700-800 MW) Dual Fuel CCGT + Complete BoP + GIS S/S + Land Reclamation + Land Expropriation Selaata CCGT Tri fuel CCGT + Complete BoP + GIS Switchgear + Zahrani-Nabatieh 220 kV OHL + 750 MW Zahrani 2 (600-700 MW) Nabatieh GIS S/S Total 1,850-2,050 MW

Temporary Plants Brief Description 3 Years Duration, Any technology + Fuel + Deir Amar/Bahsas UG HV Cable + Deir Amar - 500 MW Jieh Mobile S/Ss 100 MW Zahrani - 250 MW 3 Years Duration, Any technology + Fuel + Mobile S/Ss Jeb Jenine Zahrani 70 MW Jieh - 100 MW 3 Years Duration, Any technology + Fuel + Mobile S/Ss 250 MW

Bint Jbeil - 80 MW 3 Years Duration, Any technology + Fuel + Mobile S/Ss Zahrani CCGT 650 MW Jib Jannine - 70 MW 3 Years Duration, Any technology + Fuel + Mobile S/Ss Bint Jbeil 80 MW Total 1,000 MW - 19,000-24,000 GWH 40 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions

As per updated policy–Treasury Adv. Limits

4,500 24 4,500 24 24 24 24 24 24 24 24 4,000 22 4,000 22

3,500 20 3,500 21 20

18 3,000 18 3,000 18

2,500 14 16 2,500 14 16 14 14 2,000 14 2,000 14

1,500 12 1,500 12

1,000 10 1,000 10 7 500 8 500 8

0 6 0 6 2019 2020 2021 2022 2023 2024 2025 2019 2020 2021 2022 2023 2024 2025

Installed Capacity (others) Powerships Installed Capacity (others) Powerships New Renewables (Hydro + Wind + PV) Temporary Solution New Renewables (Hydro + Wind + PV) Temporary Solution Deir Ammar II (open cycle) Deir Ammar II (Steam turbine) Deir Ammar II (open cycle) Deir Ammar II (Steam turbine) CCGT (open cycle) CCGT (steam turbine) CCGT (open cycle) CCGT (steam turbine) New Zouk New Jieh New Zouk New Jieh Brent 64 30 40 40 50 50 50 Brent 64 30 40 40 50 50 50 41 Fuel (B$) 1.6 0.8 0.5 0.9 1.4 1.1 1.1 Fuel (B$) 1.6 0.8 1.5 1.2 1.3 1.1 1.1 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions Power Plants Procurement Alternatives

Power Purchase Agreement Structure (PPA) EPC + F Structure with OEM (Original Equipment Manufacturer)

Indemnity Indemnity Agreement Agreement World Bank Government World Bank Government

Guarantee Agreement: Government Guarantee Agreement: Government Repayment of Loans Coverage Repayment of Loans Coverage May be privatized Undertaking or Undertaking or post construction Guarantee Private Equity Guarantee EPC Contract at a fixed PPA price OEM Investor O&M Contract Project EDL EDL Power Plant Company Offtaker Offtaker Banks 20 Year PPA ECA + Banks 100% Subsidiary Loans (Export Credit Agencies) Loans

Fixed price/kwh (PPA tariff) Debt service + O&M cost, likely to be cheaper than PPA (subsidized loan 3-4%), Payment No payment during construction No payment during construction, likely Government equity of 15%

Government Recourse on Government, likely need of law / budgeting Recourse on Government, likely need of law / budgeting Liability (once EDL financials are balanced, entity can be privatized)

Procurement PPMA laws & procedures, requires pre-classification process & G to G direct negotiations with selected renowned OEMs Process post qualification of developers

Implementation High due to market conditions affecting lenders and developers Medium, OEMs need to get the backing of their Government (ECAs) and possible need of Risk investment appetite additional support from World Bank

Implementation Around 4 years Around 3 years Time 42 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions Power Plants Procurement Alternatives G2G Agreements Following Direct Negotiations with OEMs Based on MoUs

 Compliance with Lebanese laws: Law 129/2019 – IPP projects to follow Public Accountancy Law, Article 147/12 - Possibility of contracting supplies, works & services by mutual consent irrespective of transaction amount, that CoM approves based on proposal of relevant Minister.

 CoM mandated MoEW to discuss with major OEMs to explore their interest in securing financing and building power plants based on EPC+F or DBO schemes with the support of their governments through direct negotiations and G2G agreements.

 OEMs were contacted and EOIs received from all 4 OEMS each with varying levels of details, terms and conditions that need further analysis and confirmation in the next stage.

 Chinese firms expressed their interest also in supporting the Lebanese Government through securing the necessary financing and building power plants.

 MoEW prepared a template MoU to be signed with the interested OEMs and such was approved by CoM decision #2 dated 14/5/2020.

 Further to MoU(s) signature with interested parties, formal discussions and negotiations will be launched in an effort to conclude mutual agreements for the purpose of building the required power plant(s), all subject to applicable Lebanese laws and regulations.

43 MoEW | Electricity Sector Presentation | May 2020 |

General Overview Current Deficit Proposed Solutions Upcoming RE Projects

 Wind Farms Round 1: 226 MW: PPA Signed, Financial Closure by the end of 2020, COD April 2022.

 Medium Scale PV Round 1: 10-15 MW: 17 companies qualified, 12 to be selected to achieve 180 MW.

 Large Scale PV: 300 MW with 210 MWH: EOI stage, Bidding documents under preparation with the support of EBRD.

 Wind Farms Round 2: around 500 MW: Technical and financial offers expected by the end of 2020.

 Small Scale PV: 100x5 MW: Bidding documents under preparation using a licensing procedure under a predetermined fixed price.

44 MoEW | Electricity Sector Presentation | May 2020 |

PART II Selaata Land Options Evaluation

1 Background 2 Site Layouts 3 Cost Estimates 4 Conclusion

45 MoEW | Electricity Sector Presentation | May 2020 |

Background

 GoL expropriated more than 200,000 m2 in Hamat area for the purposes of construction of the northern thermal power plant in 1978.

 Most of the expropriated lands were returned to their original owners by virtue of court decisions.

 In 2014 MoEW, through Mott MacDonald, prepared a Feasibility Study to Increase Power Generation Capacity by 1,500 MW under a PPP Scheme.

Site Score Suitability (>75%) Sites were appraised based on Multi-Criteria Decision Making Zahrani 98.3% Suitable (1st) (MCDM) method that is characterized by the need to evaluate a Selaata 88.8% Suitable (2nd) finite set of alternatives with respect to multiple criteria. A tailor- made tool along with the necessary criteria, weighing system and Damour 79.2% Suitable (3rd) scoring system to evaluate the site long list was developed. Such Chekka 77.1% Suitable criteria include among others: Deir Amar 76.1% Suitable • Fuel supply Hrayche 70.2% Not Suitable • Access to cooling water Chabriha 72.5% Not Suitable • Power evacuation capability Tyre 65.1% Not Suitable • Environmental requirements Ksara 63.7% Not Suitable 46 MoEW | Electricity Sector Presentation | May 2020 |

Site Layouts

 Three different site locations were studied in detail to accommodate the Selaata 1 CCGT and the Selaata Substation.

Saydet Al Nouriyyeh Monastry Hamat Airport

Selaata Chemicals

Ras Al Shakaa Kfoury Steel Factory Reserve

Location 1 Location 3 Location 2 Unpolluted pristine area, nearby a Industrial area zoning, land Public road passing natural reserve, archeological findings, reclamation possibility, through, WWTP nearby Oil Factory salt ponds cheaper land cost

47 MoEW | Electricity Sector Presentation | May 2020 | In addition to the archaeological findings there are further obstacles, incl. military training sites and the nearby natural reserve

Location 1 – Hamat Site

Shooting Field Airforce Target

Military Bunker

Ras Al Shakaa Training Facility Reserve

Archeological findings

48 MoEW | Electricity Sector Presentation | May 2020 | Location 2 was disregarded, mainly because of its size and shape, which is not appropriate to build Selaata 1 CCGT and the Substation

Location 2 – Selaata Industrial Area 1 ▪ The envisaged area is specified as (صناعية خفيفة) industrial area - F2 Substation WWTP ▪ Total area is only around 85,000 m2 ▪ No EDL land available

Selaata 1 ▪ The area is divided by a public road ▪ WWTP underground piping passing within the land ▪ Plans to expand the WWTP ▪ Power Block doesn’t fit on main land

Selaata-1 Proposed land

WWTP

49 MoEW | Electricity Sector Presentation | May 2020 | Location 3 has been selected as it provides the optimum solution for the Selaata 1 CCGT and the Selaata substation

Location 3 - Selaata Industrial Area 2

▪ The envisaged area is specified as (صناعية أولى) industrial area - F ▪ Leveled land requires less civil works Substation ▪ Total land area is around 81,000 m2 Selaata 1  Expropriation area around 53,000 m2  Coastal Public Domain area around 28,000 m2 ▪ Reclamation of approximately 35,000 m2 of land ▪ Expropriation cost cheaper than Hamat (location 1)

50 MoEW | Electricity Sector Presentation | May 2020 |

Cost Estimates / Hamat VS Selaata

Location 1 – Hamat

Hamat PP1 and Substation Hamat PP2 Total area Total area (m2)110,000 100,000 (m2) Usable EDL owned land outside Expropriation area (m2) Expropriation area (m2) prohibited MoC area (m2) 103,000 7,000 100,000 Expert 1 Expert 2 - Expert 1 Expert 2 Minimum/Maximum cost ($/m2) 200-450 300-650 0 200-450 300-650 Average cost ($/m2) 310 483 0 310 483 Total cost ($) 31,930,000 49,749,000 0 31,000,000 48,300,000

51 MoEW | Electricity Sector Presentation | May 2020 |

Cost Estimates / Hamat VS Selaata

Location 3 - Selaata Industrial Area 2

Selaata PP1 and Substation Selaata PP2 Total area (m2)115,633 Total area (m2)100,000 Public Expropriation area (m2) domain area Reclamation area (m2) Reclamation area (m2) (m2) 52,633 28,000 35,000 100,000 Expert 1 Expert 2 - Quotation 1 Quotation 2 Quotation 3 Quotation 1 Quotation 2 Quotation 3 Minimum/Maximu 200-350 200-600 0 m cost ($/m2) Average cost ($/m2) 315 388 0 287 374 452 287 374 452

Total cost ($) 16,579,395 20,429,600 0 10,055,000 13,075,900 15,831,800 28,728,571 37,359,714 45,233,714

52 MoEW | Electricity Sector Presentation | May 2020 |

Cost Estimates / Hamat VS Selaata

Variances between Location 1/Hamat & Location 3/Selaata

100 98

90 81 80 35

70 26

60 50 50

18 Million USD Million 40 36

30 10 63 55 20 32 27 10

0 Hamat PP1 Selaata PP1 Hamat Selaata PP1 & PP2 PP1 & PP2 Minimum Cost Maximum Cost

53 MoEW | Electricity Sector Presentation | May 2020 |

Conclusion

Main factors behind the choice of Location 3 - Selaata Industrial Area 2

Factors Hamat Selaata Site zoning Touristic Industrial 1 (5th century cathedral) MoC decision #63 18/11/2005 - Archeological findings None discovered Registration of Lot# 1233 &1234 within the Archeological Findings Inventory List Risk of more archeological findings Very high Normal Military base & training area Site largely occupied by Lebanese Army None

Proximity to existing heavy Natural reserve Pristine area nearby Ras Al Shakaa industrial facilities

14% to 20% more expensive expert Less expensive expert Estimated cost (PP1 & PP2) estimates estimates Moderate (Expropriation of 52,633 m2, Risk of estimated cost increase Very high reclamation works of 135,000 (PP1 & PP2) (Expropriation of 203,000 m2) m2 having reasonably definite budget range) 54 MoEW | Electricity Sector Presentation | May 2020 |

Electricity Sector Presentation

THANK YOU

Dr. Raymond Ghajar Tel : +961 (0) 1 577 777 Minister of Energy & Water Fax : +961 (0) 1 449 639 Republic of Lebanon [email protected] ANTI-CORRUPTION STRATEGY UPDATE The National Anti-Corruption Strategy

2020-2025 Presentation Content

Process of Development

Content

Mission, Vision, Objectives and Outcomes

Outcome 1: Specialized Anti-Corruption Legislation Completed in Accordance with International Standards & Better Implemented

Outcome 2: Higher Levels of Integrity of Public Officials Achieved

Outcome 3: Public Procurement System Less Vulnerable to Corruption

Outcome 4: A more Impartial Judicial System Capable of Fighting Corruption

Outcome 5: Oversight Institutions more Specialized and Effective in Fighting corruption

Outcome 6: Community Empowered to Participate in Spreading and Instilling a Culture of Integrity

Outcome 7: Preventive Measures against Corruption integrated at the Sectoral Level

Implementation Follow-up Mechanism

Monitoring and Evaluation Mechanism

The National Anti-corruption Strategy 2020-2025 58 1 Process of Development Institutionalization of the Process

Lebanon a State Party of April the United Nations Convention 2009 Against Corruption

President: Prime Minister

The Ministerial Anti-corruption Vice President: Minister of State for Administrative The Government of Government The

Dec Feb Committee Reform 2011 Established by Prime Minister’s Decision nb 156/2011 Members: Minister of Finance- Minister of Justice – 2011

Minister of Interior and Municipalities

June 2014

President: Minister of State for Administrative Reform The Technical Committee supporting the Members: Representatives of Ministry of Finance- Dec Ministry of Justice – Ministry of Interior and Municipalities – Ministerial Anti-corruption Committee Supreme Judicial Council – Council of State – Central 2011 Established by Prime Minister’s Decision nb 157/2011 & its Inspection – Civil Service Board – Audi Bureau – Public amendments Prosecution – Higher Disciplinary Committee – Central Bank – Office of the Minister of State for Administrative Reforms

The National Anti-corruption Strategy 2020-2025 59 Process of Development The Technical Committee supporting 1 Dec Preparatory Work 2011 the Ministerial Anti-corruption

Committee

June Government of Government Technical Sub-Committee to respond 2011 Nov

on UNCAC self Assessment Checklist -

2012 February Minister’s Decision nb 184

Lebanon’s Report: Review 2014 2014 Cycle 1 of Chapter 3 Committee to develop recommendations for (Criminalization & law April a National Anti-corruption Strategy enforcement) and Chapter 2013 Minister's Decision number 85 4 (International Cooperation) The committee report

published in 2013 February May Committee on assessing Chapter 5 of 2014 UNCAC (Asset Recovery) of Government

Minister’s Decision number 63 2014 – The committee report December published in 2015

May Committee on assessing Chapter 2 of 2016 2014 UNCAC (Preventive Measures) Minister’s Decision number 64

The committee report published in 2013

60 The National Anti-corruption Strategy 2020-2025 1 Process of Development

Consultation and Drafting February The Technical Committee supporting Dec of Government

2011 the Ministerial Anti-corruption 2014

Committee –

December 2016 President: Prime Minister’s Legal Advisor Feb The Committee to develop the National Anti-corruption Strategy Members: representatives of Public Prosecution- Minister’s Decision nb 174 Ministry of Interior and Municipalities- Audit Bureau– 2016 Office of the Minister of State for Administrative Reforms

It included 32 meetings and a workshop . First Draft of the 2016 Phase 1 of Participants included more than 100 officials, April experts, senior level Judges and representatives National Anti- 2017 Consultations 2017 of Ministries, private sector and non-governmental corruption Strategy The Draft National Anti- December organizations April

corruption Strategy & its of Government 2018 Implementation Phase 2 of It included 22 meetings with Ministers, parliamentarians, 2016

2017 heads of oversight bodies, public officials from the public April Implementation Framework - 2018 Consultations sector and representatives of free trade unions, civil 2018 Framework January society organizations and private sector. The Draft Strategy was announced in

April 2018 in the Grand Serail under the 2019 Patronage of Prime Minister

61 The National Anti-corruption Strategy 2020-2025 1 Process of Development Updating, adopting and launching implementation

The committee to update the President: Prime Minister

April National Anti-corruption Strategy Members: Members of Ministerial Anti-corruption January

Committee in addition to Deputy Prime Minister and Government of 2019 and re-drafting it when necessary Minister of State for Parliamentary Affairs and Minister

CoM’s decision nb 70 of State for Presidential Affairs 2019

– October

It included 10 intensive bilateral and joint meetings with 2019 representatives of the Ministers of Finance, Justice, Interior and The Updated Version of Phase 3 of Sept 2020 Municipalities, Industry, Economy and Trade, State for the the National Anti- Consultations Presidential Affairs and State for Parliamentary Affairs, more than 2019 20 in-depth technical working sessions with experts from UNDP corruption Strategy

• During February 2020, technical working sessions were held with experts from UNDP to update the strategy • On March 2, 2020 the Technical Committee supporting the Ministerial Anti-corruption Committee held a meeting chaired by the Minister of State for Administrative Reform, in order to update members on latest developments regarding the strategy and members approved the national action plan to implement the Access to Information Law. of Government

• Subsequently, the work continued between the team of the Office of the minister of State for January Phase of Administrative Reform and experts from the UNDP to update the strategy, to conduct a final The National review taking into consideration the latest developments and to prepare for its presentation to the Adoption and May 2020 2020 Council of Ministers. Anti-corruption launch of • On May 5, 2020 The Minister of State for Administrative Reform presented the Strategy to the 2020 Implementation CoM. Strategy • On May 12, 2020. CoM discussed and adopted the Strategy. • Appointment of a Ministerial Anti-Corruption Committee in accordance with Cabinet Resolution No. 1 of February 28, 2020 and its amendments chaired by the Prime Minister and membership of the Deputy Prime Minister - Minister of State for Administrative Reform - Minister of Finance - Minister of Interior and Municipalities - Minister of Industry - Minister of Social Affairs - Minister of Justice - Minister of Information - Minister of Agriculture – Minister of Labor 62 The National Anti-corruption Strategy 2020-2025 2 Strategy’s Content Executive Summary

Introduction

Methodology Process General Context

Part 1: Part 2: State of Corruption Elements of the Strategy and Anti-Corruption

Conclusion

Follow Up Mechanism Criteria of Success

Implementation Framework

Monitoring & Evaluation Framework

References

Annexes

63 The National Anti-corruption Strategy 2020-2025 3 Vision, Mission, Goals, and Outcomes

Vision: Mission: Goals: A prosperous society prevailing in the Protecting public money and public affairs from principles of the rule of law and fostered by corruption in a manner that protects the rights First: Enhancing transparency the values of integrity under a democratic, of citizens and provides them with a decent Second: Enabling accountability fair and transparent state, which manages livelihood, and by the concerted efforts of the the affairs of the country and invests its legislative, executive and judicial authorities Third: Ending impunity wealth in a way that meets the requirements and the participation of public administrations of development, quality and modernity. and institutions, municipalities, unions, civil society, the private sector and the media.

“Outcome” 1: Specialized Anti-Corruption Legislation Completed in Accordance with International Standards & Better Implemented “Outcome” 2: Higher Levels of Integrity of Public Officials Achieved “Outcome” 3: Public Procurement System Less Vulnerable to Corruption Strategic “Outcome” 4: A more Impartial Judicial System Capable of Fighting Corruption outcomes “Outcome” 5: Oversight Institutions more Specialized and Effective in fighting corruption “Outcome” 6: Community Empowered to Participate in Spreading and Instilling a Culture of Integrity “Outcome” 7: Preventive Measures against Corruption integrated at the Sectoral Level

National Anti-Corruption Strategy 2020-2025 64 4 Outcomes Outcome 1

Specialized Anti-Corruption Legislation Completed in Accordance with International Standards and Better Implemented

7 Outputs 14 Responsible Parties

• Parliament Output 1.1 National anti-corruption institution established and activated. • Council of Ministers • Ministry of Justice An updated and effective system for combating illicit enrichment established and Output 1.2 • Ministry of Finance implemented. • Ministry of Immigration and Foreign Affairs Output 1.3 Whistleblowers protection law effectively implemented. • Office of the State Minister for Administrative Reform Output 1.4 Effective conflict of interest management system established and implemented. • National Anti-Corruption Institution (after its establishment) Output 1.5 Access to Information Law effectively implemented. • Central Inspection Output 1.6 An effective system for recovering looted public funds established and implemented. • Special Investigation Commission • State Shura Council Output 1.7 Specialized anti-corruption legislations and their effectiveness are periodically • Civil Service Board evaluated and reviewed. • Higher Judicial Council • Public Prosecution • Central Bank

National Anti-Corruption Strategy 2020-2025 65 Outcome 2 4 Outcomes

Higher Levels of Integrity of Public Officials Achieved

4 Outputs 9 Responsible Parties

Clearly defined roles and responsibilities of public officials within a modern Output 2.1: • Parliament structure of the overall public sector. • Council of Ministers • Ministry of Defense Standards of transparency and merit applied and respected in the recruitment, • Ministry of Interior and Municipalities Output 2.2: placement, transfer, promotion, compensation and non-salary benefits. • Office of the State Minister for Administrative Reform • Central Inspection A modern and integrated system to promote ethical behavior in public • Higher Disciplinary Committee Output 2.3: administrations, institution and municipalities established and implemented. • Civil Service Board • Audit Bureau Output 2.4: Independence and effectiveness of the Civil Service Bureau enhanced.

National Anti-Corruption Strategy 2020-2025 66 Outcome 3 4 Outcomes

Public Procurement System Less Vulnerable to Corruption

4 Outputs 7 Responsible Parties

Output 3.1: Centralized and decentralized public procurement more transparent and competitive. • Parliament • Council of Ministers Clear and effective oversight, control and auditing mechanisms adopted and • Council of State Output 3.2: implemented at all stages of centralized and decentralized public procurement. • Ministry of Finance • Office of the State Minister for Tender management more independent and able to reduce corruption in public Administrative Reform Output 3.3: • Tenders Administration at the Central procurement Inspection • Audit Bureau A comprehensive law that fosters public procurement, its control and audit as per Output 3.4: international standards approved and implemented.

National Anti-Corruption Strategy 2020-2025 67 Outcome 4 4 Outcomes

A more Impartial Judicial System Capable of Fighting Corruption

4 Outputs 8 Responsible Parties

Output 4.1: Strengthened judicial independence as per international standards. • Parliament • Higher Judicial Council • Council of State • Ministry of Justice Output 4.2: Integrity of the judiciary reinforced to enhance confidence in it. • Office of State Minister for Administrative Reform • Public Prosecution Output 4.3: Work of the courts and their departments more transparent • Special Investigation Commission • National Anti-Corruption Institution (after its establishment) Highest levels of legal, procedural, and technical capacities in the prosecution of Output 4.4: corruption crimes.

National Anti-Corruption Strategy 2020-2025 68 Outcome 5 4 Outcomes

Oversight Institutions more Specialized and Effective in fighting corruption

6 Outputs 9 Responsible Parties Output 5.1 Central inspection law updated and capacity to fight corruption enhanced. • Parliament The higher disciplinary council supported with necessary tools and specialized • Council of Ministers Output 5.2 • Ministry of Finance capabilities. • Office of State Minister for Administrative Reform Output 5.3 Audit Bureau law updated and its ability to fight corruption enhanced. • Audit Bureau • Higher Disciplinary Committee • Central Inspection Output 5.4 The law of the mediator of the Republic effectively implemented • National Anti-Corruption Institution Output 5.5 Internal audit integrated and activated in the public sector. (after its establishment) • Ombudsman (after its activation) Output 5.6 Coordination and cooperation between inspection units institutionalized and effective.

National Anti-Corruption Strategy 2020-2025 69 Outcome 6 4 Outcomes

Community Empowered to Participate in Spreading and Instilling a Culture of Integrity

5 Outputs 9 Responsible Parties Output 6.1 Citizens more aware of the impacts of corruption on their lives and their role in confronting it. • Parliament • Council of Ministers Output 6.2 Integrity values and behaviors better instilled among future generations. • Ministry of Interior and Municipalities • Ministry of Culture Associations, unions, religious institutions and civil society organizations more Output 6.3 • Ministry of Information capable of engaging in social accountability and promoting a culture of integrity. • Ministry of Education and Higher Education Improved capacity of journalists and media professionals to highlight cases of • Office of State Minister for Output 6.4 Administrative Reform corruption and reform efforts to counter them. • National Anti-Corruption Institution (after its establishment) A national index to measure integrity and corruption defined and its results Output 6.5 • Central Administration of Statistics published periodically.

National Anti-Corruption Strategy 2020-2025 70 Outcome 7 4 Outcomes

Preventive Measures against Corruption integrated at the Sectoral Level

4 Outputs 12 Responsible Parties

Transactions between public administration and public service users simplified • Parliament Output 7.1 • Council of Ministers and transparent. • Ministry of Industry • Ministry of Finance Corruption risk management methodologies and tools incorporated in pilot public • Office of State Minister for Administrative Output 7.2 Reform administrations, institutions and municipalities. • Ministry of Interior and Municipalities • Ministry of Economy and Trade Output 7.3 Corruption risks reduced in priority areas and sectors. • National Anti-Corruption Institution (after its establishment) • Central Bank Output 7.4 The private sector actively partnering in corruption prevention. • Ombudsman (after its activation) • Higher Privatization Council • All other relevant Ministries

National Anti-Corruption Strategy 2020-2025 71 5 Follow-up Mechanism

Ministerial Anti-Corruption Committee

Published to Technical Support Committee for the inform the Ministerial Committee against Corruption public

Tasks

Leadership and coordination Monitoring and Evaluation Communicate and coordinate of strategy implementation with the various stakeholders involved The head of the technical committee Submitted to: The head of the technical committee establishes working teams for each submits periodic His Excellency of the seven outcomes reports on the work the President progress and of the Republic, recommendations the Speaker of the House, and the Prime Specialized Anti-Corruption Higher Levels of Public Procurement A more Impartial Oversight Institutions Minister Community Empowered Preventive Measures Legislation Completed in Integrity of Public System Less Judicial System more Specialized and to Participate in against Corruption Accordance with International Officials Achieved Vulnerable to Capable of Fighting Effective in fighting Spreading and Instilling a integrated at the Sectoral Standards and Better Corruption Corruption corruption Culture of Integrity Level Implemented

Each team is responsible for developing: Action Plan + Budget + Monitoring and Evaluation Indicators for each outcome

Annual Report Periodic Reports

National Anti-Corruption Strategy 2020-2025 72 Monitoring and Evaluation 6 The formation of a national team trained in Within 3 monitoring and evaluation by the technical months committee supporting the Ministerial Adoption of the Committee against Corruption strategy Within 6 Collecting date to define the indicators months

Time Assigned task Responsible Party

Monitoring Analyze the progress of the strategy according to the Every 6 "executive framework" and the action plans that follow Anti-corruption technical committee months

Risk management Reducing the risks that can affect the strategy National monitoring and evaluation team Every year

Periodic Performance review by looking at the “executive evaluation framework” and its work plans Ministerial anti-corruption committee Every year

Reports Every year in addition Document and publish the strategy's activities and The ministerial anti-corruption committee and its to a final report their outcomes supporting technical committee

National Anti-Corruption Strategy 2020-2025 73 ANNEX | CIP PROJECT PRIORITIZATION – FIRST ROUND CIP PROJECTS | ELECTRICITY

The projects chosen to be implemented during 10 years will be divided into 3 sequences as follows:

- Sequence A: Projects that will start during the first 4 years of the cycle - Sequence B: Projects that will start during the following 3 years of the cycle - Sequence C: Projects that will start during the last 3 years of the cycle

Ref Project Est. Cost (USD MN) Sequence E1 New Power Plants on Medium Term - IPP-1000MW 1,200 A E5 Geothermal plant of 1.3MW 5 A E6 Transmission Master Plan Project 247 A E9 DSP 262.5 A E4 Hydro power plants (331.5 MW) 55 A + B+C Total A 1,711.5 Total B 17.5 Total C 17.5

Total Sector 1,746.5 CIP PROJECTS | WATER (1/3)

Ref Project Est. Cost (USD MN) Sequence A Expansion and Improvement of Supply PART 1: Projects associated with completed or ongoing Dams W1 Water supply system for Mseilha Dam. 6 A W2 Water supply system for Balaa Lake. 6 A W4 Water supply system for Beqaata Dam. 27 A W-Ongoing1 Water treatment plant for Mseilha, Balaa and Boqaata Dams 22 A W6 Water supply system for El Bared Dam DAM 20 B W3A Transmission line from Janneh Dam to Greater Beirut 50 B W5 IRRIGATION - Litani - Conveyor 800 Phase 2 - Irrigation and Water networks 100 A+B+C

PART 2: Expansions, Upgrades and Rehabilitations of Existing Networks BEIRUT AND MOUNT LEBANON WATER ESTABLISHMENT Completion of ongoing water supply systems projects, expansion, upgrade and W-Ongoing2 25 A rehabilitation of existing networks W7 Water supply system rehabilitation in Beirut area 32 B+C W8 Water Supply Projects for Mount Lebanon 224 A+B+C CIP PROJECTS | WATER (2/3) Ref Project Est. Cost (USD MN) Sequence NORTH WATER ESTABLISHMENT Completion of ongoing water supply systems projects, expansion, upgrade and W-Ongoing3 2.7 A rehabilitation of existing networks W9 Qobayat Water Supply Systems 51 A+B W10 Halba Water Supply Systems 43 A+B W11 Danniyeh Water Supply Systems 20 A+B W13 Tripoli Water Supply Systems 15 A+B W17 Batroun Water Supply Systems 11 A+B W12 Minieh Water Supply Systems 16 A+B+C W14 Zgharta Water Supply Systems 28 A+B+C W16 Koura Water Supply Systems 23 A+B+C BEKAA WATER ESTABLISHMENT Completion of ongoing water supply systems projects, expansion, upgrade and W-Ongoing4 1.5 A rehabilitation of existing networks W18 Ain El Hawr - Ras El Meil Systems 7 A+B+C W19 Ein El Zarqa 7 A+B+C W20 Laboue Water Supply System 9 A+B+C W21 Ouyoun Orghosh Water Supply System 4 A+B+C W22 Younine, Maqne and Nahle water supply systems 5 A+B+C W23 Yamoune Water Supply System 7 A+B+C W24 Yahfoufa Water Supply System 3 A+B+C CIP PROJECTS | WATER (3/3) Ref Project Est. Cost (USD MN) Sequence SOUTH WATER ESTABLISHMENT Completion of ongoing water supply systems projects, expansion, upgrade and W-Ongoing5 1.4 A rehabilitation of existing networks W31 Saida Water Supply Systems 40 A+B+C W32 Zahrani Water Supply System 40 A+B+C W33 Jezzine Water Supply System 17 A+B+C W34 Sour Water Supply System 44 A+B+C W35 Nabatiye Water Supply System 53 A+B+C W36 Bint-Jbeil Water Supply System 15 A+B+C W37 Marjaayoun & Hasbaya Water Supply Systems 33 A+B+C B Development of Resources W-Ongoing6 Completion of ongoing water supply systems projects-public wells 3.2 A Completion of ongoing water supply systems projects, expansion, upgrade and W-Ongoing7 20 A rehabilitation of existing networks Completion of ongoing irrigation projects, expansion, upgrade and rehabilitation of W-Ongoing8 8.5 A existing networks W41 Assi Phase I Dam 140 A+B Total A 488.3 Total B 601 Total C 391

Total Sector 1,480.3 CIP PROJECTS | IRRIGATION Ref Project Est. Cost (USD) Sequence Ref Project Est. Cost (USD) Sequence ML6 Damour Scheme 486,467 A B15 Hizzine Scheme 494,169 A+B+C ML11 Mayrouba and Hrajel Scheme 524,536 A B17 Kfar Dabach Scheme 131,051 A+B+C N2 Akkar El Bared Scheme 560,836 A+B+C N4 El Minie Scheme 1,108,745 A+B+C B18 Kfarzabad Scheme 2,205,944 A+B+C N6 Bcharre Scheme 1,048,847 A+B+C B19 Laboue Scheme 3,889,628 A+B+C Bouqaiaa - Machta Hamoud - N7 10,617,185 A+B+C B20 Maaraboun Scheme 43,148 A+B+C Machta Hassan Scheme B23 Marjhine and Jbab Scheme 78,162 A+B+C N9 Ehden Scheme 281,956 A+B+C N10 El Koubayet Scheme 2,506,993 A+B+C B26 Ras Baalbek Scheme 200,973 A+B+C N13 Mounjez Scheme 3,997,132 A+B+C B27 Taibet Baalbek Scheme 173,355 A+B+C N14 Omar El-Beikate Scheme 2,991,080 A+B+C B28 Taraya Scheme 983,622 A+B+C N15 Rahbe Scheme 434,537 A+B+C B32 Wadi Nahle and Maqne Scheme 2,553,911 A+B+C N16 Tanourine Scheme 4,585,412 A+B+C Yahfoufa, Jenta and Serraine B33 1,315,258 A+B+C N17 Tripoli Scheme 388,401 A+B+C Scheme N18 Zghorta Scheme 1,722,907 A+B+C B34 Yammoune Scheme 3,451,531 A+B+C B2 Aanjar (Haouch Moussa) Scheme 28,415 A+B+C B3 Aaynata Baalbek Scheme 28,242 A+B+C B35 Younine Scheme 328,327 A+B+C B4 Ablah and Niha Scheme 2,982,279 A+B+C B36 Zahle Scheme 2,103,178 A+B+C B5 Baalbek Plain Scheme 829,377 A+B+C Total A 19,531,929 B8 Chmistar Scheme 1,903,196 A+B+C Total B 18,520,926 B9 Chtaura Scheme 626,431 A+B+C B11 Ham Scheme 28,811 A+B+C Total C 18,520,926 B13 Haouch Er-Rafqa Scheme 939,739 A+B+C Total Sector 56,573,781 CIP PROJECTS | WASTEWATER (1/2) Ref Project Est. Cost (USD MN) Sequence A Protection of Mediterranean Sea WW01 Completion of missing networks and collectors WW01d Zgharta Wastewater networks + Lines from Zgharta to Tripoli WWTP 19 A WW02 Bakhoun WWTP and networks 26 B WW03 Remaining small systems in Minie - Danniye 56 B WW04 Completion of wastewater networks within El Aabde WWTP Service Area (Phase 2) 21 B WW07 + WW18c Completion of wastewater networks within Jbeil WWTP Service Area + extension of Jbeil WWTP 30 A+B WW09 Upgrade of Daoura wastewater treatment plant / Bourj Hammoud WWTP 175 A+B WW10 Beirut wastewater systems 50 A+B WW15 Upgrade of Saida wastewater treatment plant + completion of WW networks + Jbaa WW system 76 A+B WW18 Expansion of existing WWTP WW18a Chekka WWTP Expansion 20 B WW18b Batroun WWTP Expansion 20 B WW18d Nabi Younes - WWTP Expansion 72 A+B CIP PROJECTS | WASTEWATER (2/2) Ref Project Est. Cost (USD MN) Sequence B Protection of Water Resources WW20 Expansion of existing WWTP WW-Ongoing1 Completion of ongoing wastewater systems projects, expansion, upgrade 67 A WW31 Additional Funds for KfarTay system in Metn added to Hrajel WWTP 6 A WW22 Lassa and Hdeineh wastewater systems and networks 21 B WW37 Zabbougha WWTP 12.5 B WW44 El Kneisseh Wastewater System 29 B WW60 Nabaa el Tasseh Wastewater System 20 A+B WW76 Expansion of wastewater collection networks of West Bekaa (Phase 2) 27 A+B WW58 Halloussieh Wastewater System + Kfarssir + Sarafand 21 B+C WW62 Braiqaa Wastewater System 34 B+C WW69 Hermel WW system Phase 1 63 B+C Upgrade / Expansion of Iaat (Baalbek) WWTP and additional networks for Baalbek city and WW72 23 B+C surrounding villages WW75 Wastewater Systems for Zilaya, Es Srayri and Hasbaiya 37 B+C WW47 Aley Zone 7 (Gharb and Chahhar) / Bou Zrideh, Qortada, Bchitfine 75 A+B+C WW48 Aley Zone 8 (Jurd Region) and Zone 9 (Fouara /Ouadi Es Sitt) Systems / Chourit, Aghmid, Fouara 55 A+B+C Total A 360.33 Total B 562.83 Total C 132.33

Total Sector 1,055.5 CIP PROJECTS | TRANSPORT Ministry of Public Works Reprioritized Projects Ref Project Estimated Cost (USD MN) Sequence TP8/8a Rehabilitation of classified Roads and Municipal Roads 509 A TP16 Rehabilitation and Development of Beirut Rafic Hariri Airport - Phase 1 500 B TP18-1 Service road for Coastal Highway – Phase 1 106 B TP10 Bus Rapid Transit System – Greater Beirut Public Transport Project 500 C Total A 509 Total B 606 Total C 500

Total Sector 1,615 CIP PROJECTS | TELECOM Ref Project Estimated Cost (USD MN) Sequence Phase 2 FTT(X) FTTO: Fiber -To-The-Office TL1 FTTH: Fiber-To-The-Home Phase 7 FTT (X) infrastructure 100 A Project being executed under Law 66/2017. Amount in LBP and needs to be revised according to the most recent devaluation & currency Issue TL2 Phase 2 - Core Network and IMS (IP Multimedia Subsystem) Projects in progress 80% funded 90 A Expansion of international connectivity. Europa in progress, Third cable not yet started (needed) TL3 50 A but design not completed TL4 Phase 2 Security System. Only DDOS executed & Paid for 60 B TL5 Phase 2 Spectrum Monitoring. MoT project 20 B National Cloud Platform. PPP project. Tender was supposed to go public last December by the TL6 200 B high council of privatization. Nothing happened so far. Phase 2 IOT, Lora and WiFi Network. IOT pending. Public WIFI, Phase 1 started with airport and TL7 30 C remaining being executed. We need funds for Phase 2 (Tripoli, Jbeil, Saida & Sour ) TL8 GSM network. Mobile operators 150 C TL9 Fixed wireless Last mile. 303 LTE A Sites (save $70 million dollars of FTTX Project) 20 C Total A 240 Total B 280 Total C 200

Total Sector 720 CIP PROJECTS | CULTURE

Ref Project Estimated Cost (USD MN) Sequence CH11 Museums 10 A CH6 Arts Museum 3 A CH3 Theater 3 A CH2 Movies (Cinematic and documentaries) 3 A CH10 Archeological sites and surroundings 22 A+B CH9 Historical cities and buildings 15 B CH4 Music (new branches for the Conservatoire) 4 C CH5 Scientific and Educational Centers 6 C CH1 National and Public Libraries 4 C CH7 Arts General 4 C CH8 Warehouse 10 C Total A 30 Total B 26 Total C 28

Total Sector 84 CIP PROJECTS | INDUSTRY

Ref Project Estimated Cost (USD MN) Sequence IN1-2 Infrastructure for 3 industrial cities, Baalbek – Phase 2 15 A IN1-1 Infrastructure for 3 industrial cities, Alkaa – Phase 2 15 A+B IN1-3 Infrastructure for 3 industrial cities, Terbol – Phase 2 20 B IN2 Infrastructure for the Tripoli Special Economic Zone 25 C Total A 22.5 Total B 27.5 Total C 25

Total Sector 60 CIP PROJECTS | ENVIRONMENT

Ref Project Estimated Cost (USD MN) Sequence Solid Waste Management to cover all Lebanon including collection, sorting, treatment and landfill SW1 1,400 A+B+C sites. Total A 467 Total B 467 Total C 467

Total Sector 1,400