Hezbollah Struggles to Pay War Compensation Amid Dwindling Iranian Funding and Strict Airport Crackdowns

Hezbollah has yet to disburse compensation for home damage in southern Lebanon and Beirut's southern suburbs following its latest conflict with Israel. According to local residents, this delay indicates that the Tehran-backed group is struggling with the financial fallout of the war in Iran and increased crackdowns on its funding networks.

Haidar, whose family home in Blatt—a village just outside Israel's 7km deep security zone along the southern border—was destroyed in fighting that resumed in March, reported receiving no reconstruction funds. He believes this is likely because another wave of fighting may soon begin. Despite the lack of financial help, Haidar returned to the partially destroyed village lacking basic infrastructure to get his fill of it before conditions deteriorate.

Like other residents, Haidar asked to be identified only by his first name out of fear of community backlash. Following the previous conflict that ended in November 2024, displaced residents with damaged or destroyed homes could claim up to $14,000 over a year for rent and possessions. Hezbollah secretary general Naim Qassem admitted that most of these funds originated from Iran.

This time, however, payments face severe hurdles despite a precarious US-brokered framework agreement signed in June. While instability in the south could explain delays there, Beirut's southern suburbs face a different reality. Mohammad, a resident of the area whose home and businesses were severely damaged, noted that registration for financial compensation has not even opened.

Another resident, Hussein, stated that while Hezbollah continues social services like food assistance and low-cost health care, they are prioritizing members who follow their doctrine and the families of fighters. A resident of the Haret Hreik suburb staying in nearby Jnah after their home was partially destroyed reported receiving only six months of rent support—about $3,000—following the 2024 war. The National contacted Hezbollah for comment but received no response before publication.

Before the recent conflict, US State Department estimates indicated that Iran provided Hezbollah with approximately $700 million annually. Israel targeted Hezbollah’s financial infrastructure during its campaign, striking Al Qard Al Hassan branches, exchange houses, petrol stations, and garages accused of generating revenue.

This campaign compounded years of US financial pressure and sanctions against individuals and companies accused of funnelling funds or operating commercial ventures for the group. In March, the US Treasury revealed that a network had funneled over $100 million through businesses across Lebanon, Syria, and other nations.

Hezbollah was also accused of benefiting from the Captagon trade under Bashar Al Assad’s government in Syria. The fall of Mr Al Assad and subsequent crackdowns by Syria's new authorities dismantled much of the regional drug production and trafficking infrastructure, cutting off another illicit revenue source. Furthermore, the collapse of the Assad regime in December 2024 severely impacted the flow of Iranian support through Iraq and Syria, alongside the severe repercussions of the US-Israel war on Iran since March.

Additionally, strict clampdowns on potential funding entering Beirut's Rafic Hariri International Airport over the past year followed intense US pressure. Customs checks became more stringent, luggage scanners were upgraded, and security officers suspected of having ties to Hezbollah were removed. Fadi Al Hassan, the civil aviation director and acting Beirut airport chief allegedly close to Hezbollah, was dismissed in March last year and replaced by Mohammad Aziz. Security officials reported that huge quantities of cash, gold, drone components, drugs, and firearms have been seized from incoming flights originating from countries like Iraq, Turkey, and Africa.