For diplomats tracking Libya’s fragile balance, analysts modelling its fiscal trajectory, and construction firms eyeing billions in contracts, one institution is rapidly becoming impossible to ignore: The Libyan Development and Reconstruction Fund (LDRF)
What began as a reconstruction effort in the aftermath of the Derna disaster is now evolving into one of the most powerful and least understood financial actors in the country. Its rise is not only reshaping how Libya spends, but how power itself is exercised through money.
At the centre of this shift is Belqasim Haftar. Under his operation the LDRF has increased its scope, but Belqasim’s increasing desire for funds to fuel his organization is becoming a central driver of the country’s accelerating economic deterioration.
Growing pains
In June 2025, the eastern-based House of Representatives (HoR) approved a 69 billion dinar ($12.71 billion) budget for the LDRF, allocating roughly 23 billion dinars annually over three years. For a country already grappling with fiscal fragmentation, currency pressure and structural economic weakness, the scale was extraordinary.
Since its creation in 2024, it has evolved from a reconstruction vehicle into a parallel financial engine operating with limited oversight and expanding ambition. Its massively increased budget has become one of the biggest financial burdens on Libya’s worsening economy.
Libya remains overwhelmingly dependent on oil revenues, which are being strained by corruption, fuel smuggling, and inefficiencies, leading to declining state finances. This, combined with increasing state spending and abuse of the country’s financial and monetary systems, is widening the gap between the official and parallel exchange rates.
