The Address | Benghazi – Libya
ISTANBUL – Turkey plans to sign by February a preliminary $2.7 billion compensation deal for work carried out in Libya before the 2011 civil war, a sector official said, seeking to revive stalled Turkish business operations in the conflict-ridden country.
Turkish businesses have long been active in Libya but their projects were disrupted by turmoil when rebels overthrew Muammar Gaddafi nine years ago, and have been hit again by ongoing fighting there.
A significant hurdle to reinvigorating investment has been uncertainty regarding unpaid debts. Muzaffer Aksoy, chairman of the Turkish-Libyan Business Council, said the two countries were close to signing a Memorandum of Understanding (MoU).
“Work on the MoU regarding the old contracts is reaching an end. The problem of unpaid debts, damages and a letter of guarantee will be solved,” Aksoy told Reuters in an interview.
Set to be signed later this month or in February, the deal will encompass a $1 billion letter of guarantee, $500 million in damage to machinery and equipment and unpaid debts of $1.2 billion, he said.
With current projects in Libya on hold due to fighting, the backlog of Turkish contract work in Libya amounts to $16 billion, including $400-500 million for projects which have not yet begun, Aksoy added.
Turkey has become increasingly involved in the conflict, backing the Tripoli-based Government of National Accord (GNA).
The Libyan National Army (LNA), which is conducting an operation to liberate Tripoli from the grip of the militias allied with GNA, said on Thursday it would not let up in their military campaign against the militias in Tripoli, appearing to reject a call by Russia and Turkey for a ceasefire.
Despite the disruption, Libyan-Turkish trade remains buoyant, with Turkish exports reaching $2 billion annually and imports at $350 million, Aksoy said.
However, Turkish contractors with projects in Libya had not been able to travel to the country since April due to fighting.
“New contracts had been signed: projects like power stations, housing, business centres. Signatures have been signed for letters of credit for some of these. However, since April they have not been able to go for security reasons,” Aksoy said.