Lebanon’s electricity company, Électricité du Liban (EDL), is considering using bill payments to fund Iraqi fuel purchases and avert a blackout.
The Ministry of Energy and Water is preparing to resort to an emergency measure to avoid a total blackout, which could occur within the next three days, by August 17, due to the absence of any fuel deliveries.
This issue was discussed on Wednesday during a Cabinet meeting. Following the meeting, Caretaker Information Minister Ziad Makari stated that the matter is being resolved, and a decision will be made before Saturday. He clarified that a portion of the fuel will be financed through funds collected by EDL.
Notably, the public electricity provider has funds in both dollars and Lebanese pounds, but these are not currently in its account, as public institutions and administrations have yet to settle their unpaid bills. These bills, covering the period from November 2022 to June 2023, were supposed to be paid using a Treasury advance of 6,850 billion Lebanese pounds. However, only 1,000 billion pounds have been transferred to EDL. Since Iraqi fuel is paid for in Lebanese pounds, EDL has been able to retain its dollars to purchase additional fuel necessary for the operation of power plants, which would allow for an increase in electricity production.
It is worth noting that despite preventive measures taken since July 27 to avoid a blackout, the Deir Ammar power plant has been out of service for a week due to a complete depletion of its diesel stock.
The public provider had to shut down one production unit at the Zahrani plant to conserve its fuel stock. These measures were aimed at ensuring the operation of the other unit at the Zahrani plant for as long as possible and thus providing as much electricity as possible to citizens and maintaining a continuous power supply to vital facilities such as the airport, port, water pumps, and sewage systems.
According to the public company, the delay in diesel delivery is due to the fact that no shipment has been allocated under the exchange agreement with Iraq for a cargo intended for EDL, neither for July nor for August 2024.
Lebanon’s electricity production currently relies on the Zahrani and Deir Ammar power plants, as the Jiyeh and Zouk plants require maintenance work. Zahrani and Deir Ammar receive monthly diesel supplied to EDL by the Ministry of Energy under the exchange agreement between Iraq and Lebanon signed on July 23, 2021.
This agreement, which came into effect in September 2021, stipulates that Iraq will supply fuel to Lebanese power plants under favorable conditions, with the quantity set at 100,000 tons per month. However, due to its high sulfur content, Iraqi fuel cannot be used directly in Lebanese power plants. Therefore, Lebanon purchases a compatible type of fuel from other suppliers selected through tenders, and in exchange, these suppliers receive the Iraqi fuel.
