Libyan banks to cough up billions of dollars for Turkish firms

Sara Rashad

The Libyan newspaper, al-Marsad, revealed recently a major crisis awaiting the Libyan economy.

The crisis, it said, would be precipitated by the cancellation by the Central Bank of Turkey of all letters of credit issued for Libyan banks.

This move makes it necessary for Libyan banks to pay in cash for the billions of dollar-worth projects Turkish companies implement in Libya, especially those that have not been implemented since 2011 because of the war.

Libyan banks, the newspaper said, have to pay hundreds of billions of dollars for these projects to be implemented.

It said the Central Bank of Turkey took this decision in mid-June.

So far, the Central Ban of Libya, which is controlled by the Turkey-backed Government of National Accord and the Muslim Brotherhood, refuses to comment on the decision of the Central Bank of Turkey.

Al-Marsad said the cancellation of the letters of credit means that Turkish banks would not be responsible for compensating Turkish companies for their failure in honoring their contracts in Libya because of the war.

The Libyan banks, it said, would be responsible for paying this compensation.

The interim Libyan government, which is affiliated to the Tobruk-based House of Deputies (parliament) said on Facebook that it sought ways to annul contracts signed with Turkish companies, given the fact that Turkey is an “enemy” state.

It revealed that it convened recently to discuss this issue.

Interim Prime Minister Abdullah al-Thini issued an injunction for withdrawing all projects from Turkish companies in the light of Libyan law.

He said Turkey is a country that pursues policies hostile to the Libyan people and their army.

This is why these projects have to stop, al-Thini said.