Future of Solar Power in Lebanon Hinges on Licensing and Financial Viability

A report by Bassam Abou Zeid, English adaptation by Nadine Sassine

The joint project between Total Energies and Qatar Energy to produce 100 megawatts of solar power will only see the light of day under two conditions: first, if the consortium buys a production license from those granted to companies in 2022, as CMA CGM did, and the Cabinet decides to increase the capacity of this license from 15 to 100 megawatts; second, if the Parliament reauthorizes the government to grant new licenses.

This project is neither a gift from the French and Qatari companies nor cost-free. In any electricity production project in Lebanon, questions arise about the ability of Electricité du Liban (EDL) to pay for the electricity it will purchase. Sources within EDL emphasized that the financial situation has significantly improved, which will enable it to cover the costs of electricity produced by the French-Qatari project. Until May 17, 2024, EDL's financial assets amounted to $38.1 million in fresh dollars and 800 billion Lebanese pounds in fresh currency, equivalent to $8.9 million. These amounts are expected to increase, especially since the overall electricity billing collection rate in Lebanon is 85%.

Meanwhile, Caretaker Minister Fayad revealed that a payment mechanism is being discussed with the French and Qatari companies even before the project begins. This mechanism includes guarantees that will satisfy the consortium and the Banque Du Liban, which is not willing to return to any form of subsidy for EDL, which must rely on its financial resources and profits to secure electricity.

If this project proceeds, it will certainly pave the way for similar projects, especially if EDL successfully meets its financial obligations.