No light at the end of the tunnel: The complexities of implementing Lebanon's emergency electricity plan

Lebanon Economy
2023-04-12 | 11:21
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No light at the end of the tunnel: The complexities of implementing Lebanon's emergency electricity plan
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2min
No light at the end of the tunnel: The complexities of implementing Lebanon's emergency electricity plan

The emergency plan for electricity is facing difficulties in securing and funding fuel for power plants, converting collection money from Lebanese Lira to US Dollars, the exchange rate to calculate tariffs, and the slow removal of violations and increasing thefts that affect the networks.

All of these issues were presented by Caretaker Minister of Energy, Walid Fayyad, and the Chairman of Electricité du Liban, Kamal Hayek, in front of the specialized ministerial committee chaired by Caretaker Prime Minister, Najib Mikati, in an attempt to find solutions to continue with this plan at the minimum level.

In this regard, it was decided to communicate with the international organizations concerned with the Palestinian refugee camps and Syrian refugees in order to pay the bills after meters were installed by Electricité du Liban.

The Minister of Energy was requested to communicate with the Minister of Finance to secure financial credits for official institutions to pay their dues to Electricité du Liban.

Additionally, a meeting with the governor of the Central Bank was scheduled to determine the exchange rate of the US dollar, based on which the amounts deposited by Electricité du Liban in the Central Bank will be converted from Lebanese Lira.

The committee agreed to open credits to purchase 66,000 tons of Gas Oil and to conduct a new tender to purchase 66,000 tons of Gas Oil and 21,000 tons of Fuel Oil.



However, there is still no indication of achieving financial balance as the billing is still being calculated at a rate of LBP 52,320, while Sayrafa rate is LBP 87,000 and the market rate is LBP 97,000.

Calculating the increase in the tariff based on a collection rate of 60% in order to compensate for losses may not be beneficial if the electricity dollar does not match the Sayrafa rate or market dollar.

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