During his visit to Iraq, Lebanon’s caretaker Prime Minister Najib Mikati and his delegation did not provide concrete assurances about settling Lebanon’s financial obligations to Iraq for the fuel and gas oil conversion deal with Lebanon’s public power provider, Electricité du Liban (EDL). Instead, Mikati merely outlined the current challenges faced by the Lebanese Parliament, which prevent it from meeting regularly and passing necessary legislations, including a bill to settle Iraq’s financial dues. Mikati spoke of a promise made by House Speaker, Nabih Berri to schedule a legislative session to address this issue, but a date has yet to be fixed.
Among the commitments made by Mikati - contingent upon the Lebanese Parliament's approval of a law related to the Iraqi dues - is a plan to use approximately $75 million held by EDL for partial payments to Iraq. However, this proposal was swiftly rejected by caretaker Minister of Energy Walid Fayad, who argues that the funds should instead be allocated for purchasing additional gas oil regardless of the current bilateral agreement. The existing deal provides for two tankers of gas oil per month, with a potential third tanker financed by Electricité du Liban’s funds. This move would not only increase electricity supply hours but also boost EDL’s revenues.
In fact, under the first contract with Iraq, the Lebanese government has transferred the sum of $531 million - in lollars - to the account of the Iraqi Central Bank at Lebanon’s Central Bank (BDL). Lebanon still owes $191 million under the second contract with Iraq, due to expire on July 27, a sum which has not yet been transferred and which Iraq is demanding.
In the same context, the Iraqis have asked to receive goods and services for the value of the funds transferred to the Iraqi Central Bank account, but this has still not been done, given that no mechanism has been approved to purchase the goods and services in question on the Lebanese market.
The IDAL company should be in charge of this operation, which is supposed to be financed by the payment of around $400,000. However, the Lebanese government has still not managed to pay this sum, which is halting the process.
The Iraqi side has acted in good faith during the negotiations with the Lebanese government, expressing willingness to renew the fuel contract for a third time, provided Lebanon commits to repay its debt. Iraq considers failure to fulfill promises as manipulation and rejects such behavior outright.
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