BEIRUT/SINGAPORE - Lebanon will receive a $70 million grant from the World Bank to help the country in its reconstruction efforts following Israel's 34-day bombardment, the global body announced Tuesday. The money will be placed in a trust fund, will come from the bank's surplus and will not involve any additional debt burden for Lebanon, the World Bank said in a media statement.

The decision was announced during the joint World Bank/International Monetary Fund Annual Meeting in Singapore, which adjourned Tuesday.

The pledge was part of a worldwide campaign to raise funds for the Lebanese government in its efforts to rebuild infrastructure and housing destroyed by Israeli bombs.

Lebanon has already received a pledge of $940 million from donor states that met in Stockholm earlier this month.

The Council for Development and Reconstruction has said that the cost of rebuilding infrastructure alone will come to $3.6 billion.

"The impact of the hostilities on the Lebanese economy has been severe and deserves the attention and support of the international community," said Juan Jose Daboub, managing director of the World Bank.

"Since the cessation of hostilities, the bank has been looking at ways in which it can support the government of Lebanon, without adding to its public debt burden," said Daboub. "Lebanon is one of the most indebted countries in the world, with public debt in excess of 180 percent of GDP. The country cannot afford additional borrowing for reconstruction, and we are trying to help prevent that, despite the dramatic increase in expenditure and a decrease in revenue due to the hostilities."

Lebanese Finance Minister Jihad Azour said earlier that the public debt was expected to reach $41 billion at the end of the year, warning of political and social unrest if international aid does come through. http://www.dailystar.com.lb

The trust fund will be used in part to advance projects already under preparation, especially in the municipal and water sectors. Part of the grant will go to the International Finance Corporation (IFC), the private sector arm of the World Bank Group. The IFC, in close cooperation with the Lebanese government, is preparing a program to rehabilitate Lebanon's private sector, focusing on small and medium enterprises and the removal of administrative barriers.

The World Bank's approval of the trust fund is the latest in a series of steps undertaken by the bank in support of Lebanon.

Immediately after the cessation of hostilities, the Bank approved 100 percent financing for all its projects in Lebanon, exempting the government from the average 25 percent co-financing commitments for each of the six projects currently underway.

The bank has already substantially reallocated uncommitted funds in its portfolio to address urgent needs in close cooperation with the Council for Development and Reconstruction. For example, $12 million under the Education Development Project has been redirected to the rehabilitation of educational facilities in the affected areas.

At the request by the Lebanese government, World Bank teams have begun work on an Economic and Social Impact Assessment, which will be a primary source for the preparation of the government's reconstruction and reform program in advance of a donor conference it plans to convene in Beirut later in the year.

Separately, the Bank's Post-Conflict Fund has allocated a $1 million grant to help Lebanon establish a transparent and accountable system for tracing reconstruction assistance, and to simplify and accelerate implementation. (Agencies)