EBRD extends EUR 5 bn lifeline for war-affected economies

EBRD extends regional lifeline

The European Bank for Reconstruction and Development (EBRD) is committing EUR 5 bn this year to stabilize economies reeling from the war in the Gulf, according to a statement. The package is directed primarily at Iraq, Lebanon, Jordan, and Palestine — all countries directly affected by the war — as well as economies that are facing knock-on effects, including Egypt, Turkey, Armenia, and Azerbaijan.

What’s next: Expect short-term facilities for state-owned energy utilities to ensure service continuity despite the rising price of energy. Look for the lender’s focus toward the rebuilding of trade routes when conflict recedes.

BACKGROUND- We reported last month that the bank was prepping a financial lifeline to Egypt and others in the region. EBRD has deployed some EUR 26.5  bn in our corner of the world (which it calls the “southern and eastern Mediterranean region”) since 2012.

China’s Henan Zhongfu to roll out USD 2 bn aluminum plant in SCZone

Chinese aluminum manufacturer Henan Zhongfu will set up a USD 2 bn aluminum megaproject in the Suez Canal Economic Zone (SCZone), according to a cabinet statement. The 1 mn sqm facility in East Port Said will target high-value deep processing for the automotive and electronics sectors.

Why it matters: Egypt is emerging as the primary “safe harbor” for heavy industry as regional conflict cripples the GCC’s aluminum giants. With Iranian facilities offline and drone strikes targeting Abu Dhabi’s Emirates Global Aluminum and Aluminum Bahrain, prices went up nearly 5% last month — moving steadily toward a projected USD 4k per ton. By landing this project now, the SCZone is an increasingly important node in the global supply chain.

Lafarge found guilty of terrorism financing in Syria

French cement company Lafarge was found guilty of funding ISIS and other armed groups during Syria’s civil war in a landmark ruling from the Paris Criminal Court. The ruling orders Lafarge — which is now part of Switzerland’s Holcim — to pay the maximum fine of USD 1.2 mn for breaching EU sanctions in addition to funding terror, and sentences former CEO Bruno Lafont to six years in prison. Another seven associates were fined and sentenced to prison.

Background: The case, which was first investigated in 2016, centers on Lafarge paying as much as EUR 13 mn to terrorist groups including ISIS and Al Qaeda-affiliated Nusra Front between 2013 and September 2014 to keep its cement factory in Syria operational. The decade-long legal dispute sets a significant precedent but falls short of ordering compensation for the Syrian employees of Lafarge as victims of terrorism financing.