Germany's Foreign Ministry on Sunday said it would offer Libya's National Transitional Council up to 100 million euros ($144 million) in loans for civil and humanitarian purposes.
Berlin has held off support for the NATO-led military intervention in Libya, but has tried to support the rebel-led council in other ways.
"Due to Colonel (Moammar) Gadhafi's war against his own people, the situation in Libya is extremely difficult," Foreign Minister Guido Westerwelle said in a statement.
"The funding is lacking to build necessary structures and to overcome supply shortages - from medical care to food. People are suffering more and more as a result, particularly in eastern Libya."
Westerwelle said the loans could be paid back with Gadhafi's frozen assets once the UN Security Council releases them to a new Libyan government.
NATO airstrikes continue
Meanwhile NATO warplanes hit a string of military targets in Tripoli on Sunday. An official with the alliance said from the Libyan mission's headquarters in Naples, Italy that "two command and control nodes, two surface-to-air missile launchers and one anti-aircraft gun" were hit in the strikes.
Gadhafi said in an audio message broadcast by state television late on Saturday that the unrest that has plagued his country since February was part of a "colonial plot."
The NATO airstrikes were originally started to prevent the fall of rebel-held cities like Misrata and Benghazi, but they have thus far failed to bring down Gadhafi's regime.
Author: Andrew Bowen (Reuters, AFP)
Editor: Ben Knight