The International Finance Corporation (IFC) is mulling providing support for letter of credit (L/C) business in Libya as it seeks to rebuild its economy.

The IFC is looking for ways to help boost confidence amongst foreign business partners and investors who are still cautious about doing business with the North African country.

Discussions underway

According to an IFC official, the private investment arm of the World Bank Group has not yet decided how to support Libya's economic restructuring efforts but it is in talks about possible investments in the country.

The official suggested that the IFC often invests first in the financial sector to encourage trade finance flows, particularly in circumstances such as Libya's where banks are often not comfortable about taking L/C risks.

Unstable conditions

Libya is still far from stable with local militias - that notionally recognise the National Transitional Council - controlling locations across the country.

But the prospects for Libya, with its vast stores of oil and gas and a small population, are potentially very good if political stability can be brought to the country.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.