The Libya wilaya (province) of the Islamic State has re-established itself by consolidating its logistical bases in southern Libya from where it is likely to plan a new terrorist campaign against forces loyal to the two Libyan rival governments.

• There are increasing indications that the Islamic State has established a stronghold in the southern Libyan desert that is enabling the group to increase its operational capabilities by attracting new recruits and accumulating weapons.
• This logistics base is allowing the Islamic State to mount increasingly regular hit-and-run operations across the south of the country aimed at securing funds, weapons, and military vehicles.
• The group's strategy is likely to expand the geographical reach of its operations and mount a new terrorist campaign focused on high-profile government and security targets in Tripoli, Misrata, and in the east.

On 31 December 2018, Libyan National Army (LNA) southern units, including the 10th Infantry Brigade and the Khalid bin Walid Battalion, raided a number of agricultural projects near the southern village of Ghudwah (60 km south of Sabha) as they were pursuing a group of armed Chadian militants suspected of using the area as a logistic base. The operation came in response to an attack on the barracks of the LNA's 10th Infantry Brigade in Taraghin (140 km south of Sabha) on 27 December, in which three LNA soldiers were killed, that at the time was blamed on Chadian opposition groups. During the operation, however, LNA forces found and rescued 22 civilians, abducted by the Islamic State during raids on the southern villages of Fuqaha and Tazerbu in November 2018.

Pushed by the first discovery, LNA forces launched a wider combing operation in the area, during which they also discovered a large warehouse containing large quantities of explosives and used to produce 'sticky' improvised explosive devices (IEDSs), vehicle-born IEDs, suicide vests. The raids on the agriculture projects coincided with two separate suicide bombers attacking and blowing themselves up inside the Ghudwah police station. The first attack resulted in no casualties, while the second is reported to have caused three deaths and left four people injured. According to Libyan media, one of the assailants had been captured in the Ghudwah farm by local residents and later taken to the police station.

Logistics base
According to Libyan eastern authorities, most of the suicide vests and VBIEDs used by the Islamic State in its major terrorist operations in Tripoli since mid-2018 had been manufactured in the Ghudwah bomb-making facility. These operations include the 2 May 2018 double suicide attack that targeted the High National Election Commission office; the 10 September 2018 assault on the headquarters of Libya's National Oil Corporation; and the 25 December 2018 suicide attack on Libya's foreign ministry, which killed three people and wounded at least 21. This suggests that, almost two years after the group's expulsion from its Sirte stronghold, the Islamic State has managed to establish logistics infrastructure in southern Libya and is gradually recovering its former military capabilities. This logistics base is allowing the Islamic State to mount increasingly regular hit-and-run operations in mostly isolated and rural areas across southern Libya aimed at securing funds, weapons, and military equipment, of which the 27 December 2018 attack on the LNA barracks in Taraghin is one example, and the attack on Tazerbu police station on 23 November 2018 is another. The increasing number of civilians and political figures kidnapped by the group also indicates that the Islamic State is seeking to secure funds through the payment of ransoms.

Influx of veteran fighters
The Islamic State continues to benefit from the fractured Libyan political and security landscape to remain an effective relevant actor, despite its aspiration to governance ending in Sirte in December 2016. The group's ranks have been reinvigorated by the arrival of veteran foreign jihadists from Syria and Iraq. The hostages rescued in Ghudwah, for instance, stated that they were kidnapped and later interrogated by armed men variously speaking in Iraqi, Syrian, Tunisian, and Yemeni dialects. Although the presence of foreign fighters in the ranks of the Islamic State in Libya has been a constant, there are increasing indicators suggesting that the long-expected transfer of foreign fighters from the Levant towards Africa is now in motion. Similar dynamics have also been observed in Algeria and Nigeria.

Outlook and implications
The Islamic State's ability to re-establish itself in southern Libya, coupled with the ease by which it has been able to transfer militants and weapons into Tripoli and penetrate through highly secure locations there, indicate the group has managed to infiltrate or co-opt criminal and smuggling groups to maintain the security of its operational networks and supply lines. The fact that the LNA raid in Ghudwah came about by chance, rather than actionable intelligence, also indicates that the Islamic State's logistics base in southern Libya is unlikely to have been significantly degraded, given the group's use of mobile training camps and warehouses in unpatrolled desert areas in the Fezzan. IHS Markit assesses that the group is in the process of planning a new terrorist campaign against forces loyal to both of the rival Libyan administrations, with the most likely targets including government and security buildings in Benghazi, Bin Jawad, Misrata, Sirte, and Tripoli; prisons with the aim of freeing detained fellow militants; embassies (several Western countries are ready to re-open in Tripoli); foreign NGO offices, and other sites frequented by foreign nationals. The group is also likely to co-operate with criminal gangs to stage bank robberies and kidnap-for-ransom of politicians and businessmen, a risk likely to extend to foreign workers at energy sites, especially around the Murzuq basin. Key indicators of increased risk include the emergence in the group's arsenal of more powerful VBIEDs using armored trucks, weaponized drones to target LNA barracks and checkpoints, and unclaimed assassinations targeting moderate imams.