ABU DHABI FUND FOR DEVELOPMENT: PROJECTS IN LEBANON,

C O N F I D E N T I A L ABU DHABI 000197 SIPDIS SIPDIS E.O. 12958: DECL: 2/07/2017 TAGS: ECON PREL EAID PHUM LE AF YM AE SUBJECT: ABU DHABI FUND FOR DEVELOPMENT: PROJECTS IN LEBANON, AFGHANISTAN, AND YEMEN Classified by Ambassador Michele J. Sison for reasons 1.4(b) and(d). ¶1. (C) On February 6, Econoff met with Ahmed Hussain Al Baker, Acting Director General of the Abu Dhabi Fund for Development (Fund) to discuss the Fund's assistance to Lebanon and Afghanistan. The UAEG pledged $300 million in soft loans to Lebanon during the Paris Donors' conference. Al Baker said the Lebanese government had not yet decided how to use the $300 million. According to Al Baker the Fund would send a mission to Lebanon to assess the country's needs: "Lebanon asked if the Fund would finance their debt services, but the Fund does not provide debt services relief." ¶2. (C) Al Baker explained that the payment terms of the $300 million in soft loans to Lebanon are "very generous." The Lebanese government will have 25 years to re-pay the loan, including a 5 year grace period at 3 percent interest. The Fund's usual rate of re-payment is higher than 3 percent and the usual term is 15 years, including a 3 year grace period. Al Baker added: "The UAE is very concerned about Lebanon and wants the aid to happen quickly." Al Baker has spoken to the Lebanese Finance Minister about what projects the funds could be used for, but did not elaborate on the possible projects: "The Lebanese government needs cash more than projects, but cash is very difficult to give since the Fund cannot keep track of what it is being used for." Al Baker commented: "I do not understand why the Lebanese government did not ask for re-scheduling of payments at the recent donors' conference in Paris." ¶3. (SBU) During the London Donor's Conference in January 2006, the UAE pledged $30 million to Afghanistan to build roads in Kabul. (Comment. This is unusual since the Fund generally provides loans, not grants. End comment.) ¶4. (SBU) In November 2006, the Fund pledged $500 million for projects in Yemen. $150 million has already been allocated for dam projects in Yemen, but the rest of the money has yet to be allocated. SISON