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3. Rebuilding to Restore Control? Hezbollah’s $3 Billion Gamble

Three billion dollars. That is the amount estimated by Hezbollah for the reconstruction of war-torn areas through its Waad project and the Jihad al-Bina association. Yet such a figure immediately raises questions. The group is widely believed to be strapped for cash—squeezed by US sanctions and by a land, air and sea blockade meant to choke off Iranian aid. So where, exactly, would Hezbollah find the billions required for such an effort?

The question prompted This is Beirut to examine the likely sources of funding, the stance of the Lebanese state and the broader security and political ramifications—particularly how Israel might interpret a quick reconstruction drive, not merely as rebuilding, but as Hezbollah rearming and regrouping.

When Audacity Defies Reason

Beyond the human toll—often with strategic implications—the war between Hezbollah and Israel following the October 7, 2023, offensive inflicted significant material damage on Hezbollah. A World Bank report dated March 7, 2025, estimates direct losses across ten sectors in Lebanon at $7.2 billion, with post-conflict reconstruction and recovery needs reaching $11 billion. The report assesses damages, losses and recovery requirements across ten sectors nationwide, covering the period from October 8, 2023, to December 20, 2024.

Of the $11 billion in post-conflict reconstruction needs, $3 to $5 billion will, according to the report, require public funding, including $1.1 billion for critical infrastructure such as energy, transportation, municipal services, water and irrigation. The remaining $6 to $8 billion is expected to come from private financing, primarily for housing, commerce, industry and tourism.

Notably, three months after the report’s release, on June 24, 2025, the World Bank approved $250 million in funding for Lebanon to support pressing repairs, reconstruct essential public infrastructure, restore critical services and sustainably manage debris in conflict-affected areas. This led to the creation of the Lebanon Emergency Assistance Project (LEAP). Designed as a scalable $1 billion framework, it starts with the initial $250 million contribution and can incorporate additional financing—grants or loans—within a unified, government-led structure that emphasizes transparency, accountability and tangible results.

Yet, ironically, Hezbollah deems these funds “insufficient,” claiming they “do not even amount to a quarter” of what it says it has already invested in repairs and rehabilitation—restoring 402,000 housing units, providing shelter for 15,000 families and clearing 90% of the debris, excluding border villages, according to the Iran-aligned group’s figures. But isn’t it Hezbollah that sparked the war and caused this destruction? Should it not assume full responsibility for the aftermath? 

The “Party of God” is acutely aware of the mounting anger in its own strongholds, where supporters are demanding accountability. Pressed from all sides, it has little choice but to cast itself as savior, launching a sweeping reconstruction plan to calm unrest, rally its base and show that it is, at the very least, “taking action.” This led to the $3 billion reconstruction project. But what does it actually involve?

A Construction Project or a Tool of Power?

According to sources close to the matter, the plan would unfold in three phases. The first calls for a $1 billion injection to rebuild Beirut’s southern suburbs. The second and third phases would allocate similar amounts to towns in the South and the Beqaa Valley, also severely affected by the war. An additional $500 million is earmarked for rapid compensation to affected families, aimed at easing public anger and solidifying the party’s social base.

The stated objective is clear: to rebuild faster than the state, quiet internal opposition and strengthen Hezbollah’s hold over the affected territories. The awarding of contracts, housing relocations and compensation payments thus become levers of political and social influence. However, experts warn of the risk of “dual-use infrastructure”—tunnels or storage sites potentially being covertly integrated into civilian construction projects, a practice already condemned by Washington in 2006, following the previous Hezbollah-Israel war.

Once the program is officially launched—it has not yet been—attention will turn to fundraising and implementation. To finance the project, Hezbollah is reportedly relying on a mix of private donations, informal regional networks and Iranian transfers that bypass official banking channels. This opacity exposes partners, contractors and subcontractors to potential sanctions and makes any international audit virtually impossible. For the execution, the group plans to rely on two of its key structures: Jihad al-Bina and the Waad project. But what exactly do these involve?

Founded in the 1980s, Hezbollah’s engineering and public works arm, Jihad al-Bina, gained prominence after the 2006 war by rebuilding Beirut’s southern suburbs at an impressive pace. Its efficiency earned it a strong reputation, but also drew sharp criticism for a lack of transparency, uneven construction quality and preferential treatment of the movement’s allies. Subject to US sanctions, Jihad al-Bina is accused of acting as a logistical front and channeling Iranian funds, while largely bypassing international standards and audits.

As for the Waad project (“Promise”), it manages donations, recruits engineers and contractors and selects beneficiaries. Already deployed after 2006, it helped rebuild hundreds of buildings in record time—but at the cost of persistent opacity and uneven access to aid. Waad gives Hezbollah a dual advantage: bypassing financial obstacles and consolidating its social and political control over the reconstructed areas.

Each construction site becomes a lever of power, reinforcing the image of a “state within a state” and giving Israel yet another reason not to let Hezbollah off the hook…