Libyan rebels seek 3 billion dollar loan to save economy

May 3, 2011

, BENGHAZI, May 3 – Libyan rebels controlling the east of the country said Tuesday their economy will collapse by June unless France, Italy and the US make a three-billion dollar loan secured by Moamer Kadhafi\’s frozen assets.

"The liquidity that we have domestically most likely will carry us through three weeks, at the most four weeks," said Ali Tarhoni, who holds the economy and oil portfolio in the rebel administration.

"I think if we get lines of credit from our friends in France, Italy and the United States we will be fine," he told reporters in the rebel capital Benghazi, adding that "we need two to three billion dollars."

That would enable his administration to get through the next three to four months, he said.

Tarhoni said a consensus had already been reached beween the rebels and the major powers which the rebel leadership will meet in Rome on Thursday to set up a mechanism to get credit lines opened.

The rebel leadership is no longer seeking for Kadhafi\’s assets to be unfrozen and given to the rebel administration but for credit lines to be opened that would be secured by the countries in which these assets are being held.

"The consensus is that there will be lines of credit backed by these assets," he said, adding that that consensus would be formalised at the meeting in Rome of the International Contact Group on Libya.

Tarhoni did not specifically say that the three countries had agreed to provide the three billion dollar loan he is seeking. He said he believed Kadhafi\’s frozen assets around the world amounted to 165 billion dollars.

The Rome meeting is aimed at finding a political solution to the conflict in Libya, amid a bloody stalemate in the fighting and an escalating humanitarian crisis.

The International Contact Group talks will also discuss whether to arm the uprising against Kadhafi and how to finance the rebels, including through oil sales from eastern Libya on world energy markets.

But Tarhoni said that the rebels had no plans to resume significant oil exports as their current priority was to ensure oil installations were made secure.

"The top priority is to protect the installations, not to produce," he said.

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