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To help solve a part of the electricity problems that plague the daily lives of the Lebanese people, Qatar is offering Lebanon three renewable energy power plants with a capacity of 500 MW, enough to meet about 25 to 30% of the country’s energy needs.
This information was confirmed to This is Beirut by sources close to the Ministry of Economy.
The Qatari Minister of State for Energy, Saad bin Sherida Al-Kaabi, informed the Caretaker Minister of Economy, Amine Salam, who was visiting Doha, of his country’s willingness to help Lebanon meet its energy needs by supplying three alternative energy plants in partnership with TotalEnergies.
Al-Kaabi said that this initiative was a gift with soft conditions and that all the Lebanese side had to do was provide the necessary space to implement the project.
The Lebanese authorities will only have to choose three sites according to their priorities and needs.
It remains to be seen whether the Ministry of Energy will take up this tempting offer for the Lebanese, and certainly less so for those who have controlled the electricity sector for more than a decade and who benefit from it in one way or another. Previous offers from Kuwait and Germany to develop the sector have been rejected by a ministry incapable of developing a sector that is costing the state astronomical sums.
The World Bank estimates that about 46% of the Lebanese public debt accumulated since 1992 (more than $100 billion) is due to transfers from the Treasury to the EDL for electricity, which is supplied in dribs and drabs and paid for by citizens at a very high price.
The construction of these three power plants would go some way toward solving the electricity problem, which has been exacerbated by the economic crisis in Lebanon. This was reflected in the lack of funds to purchase sufficient quantities of fuel to increase the hours of power supply and to maintain the very old power plants.
Last May, the Caretaker Minister of Energy, Walid Fayad, signed energy purchase contracts with 11 private companies for the construction of power plants producing electricity from solar energy. These companies were selected following a tender launched by the Ministry in 2017 for this purpose, based on specifications drawn up in accordance with the standards of the World Bank and the EBRD (European Bank for Reconstruction and Development).
The Ministry received 264 applications for participation. Forty-two submitted detailed bids. However, the selection was not made until 2022, five years after the call for tenders, which caused an outcry at the time. The companies’ intentions were submitted in the first quarter of 2018.
Pierre Khoury, managing director of LCEC, told This is Beirut at that time that the output of the 11 photovoltaic farms would be connected to the public grid of Electricité du Liban. Each has a capacity of 15 MW (165 MW in total) and costs between $7 million and $9 million per farm, he added, specifying that they will be located in different regions of the country.
The new power plants will be managed by the private sector, which will sell its output to EDL at a price that is expected to be a third of EDL’s production cost (17 cents per kilowatt-hour), which is currently based on fuel oil and diesel.
However, Khoury told This is Beirut that the biggest challenge remains the financing of these projects, which will cost between $80 million and $100 million in total.
The companies had one year from the signing of the contract to secure financing for the construction of the photovoltaic farms from international banks specializing in financing such projects. But will these banks agree to invest in a sector where corruption and mismanagement are rife?
