Ministry reports progress
on electricity recovery plan

Structured around seven pillars

The Ministry of Energy and Water is implementing a comprehensive roadmap for the recovery of the electricity sector. While the impact may not be immediately tangible for citizens at the speed many expect, the Ministry emphasizes that the current phase is foundational and unavoidable. The objective is to prepare the legal, financial, and technical groundwork necessary to restore confidence and attract investors once conditions allow.
Investors, as in all markets, require financial and security stability, but above all, they need assurance that laws are enforced and contractual obligations are respected. The Ministry’s efforts over recent months have focused on building this enabling environment.

The recovery plan is structured around seven main pillars.

First Pillar: Increasing conventional generation capacity

It is an urgent requirement to construct two large conventional power plants, each with a capacity of approximately 125 megawatts, located in Deir Ammar and Zahrani. The estimated combined cost is around $2 billion.
The country has spent approximately $26 billion in recent years on fuel purchases alone, underscoring the economic inefficiency of not investing in modern generation capacity earlier.

Two parallel tracks are being pursued:
1. Engagement with Gulf countries that are considering investments in Lebanon’s power sector. Joint technical committees are already working on these projects.
2. Collaboration with the International Finance Corporation (IFC), part of the World Bank Group, which is supporting the process, particularly in structuring financial guarantees required by investors.

Given the inherited financial distress, investors require assurances on payment mechanisms. The IFC, in coordination with the Ministry of Finance, is assisting in designing financial guarantee structures to mitigate sovereign risk.

Second Pillar: Promoting renewable energy

The Ministry is actively encouraging investment in renewable energy:
• In 2022, 11 renewable energy licenses were issued but left inactive. Four have since been reactivated.
• Two projects in southern Lebanon are currently stalled due to access constraints, while five others are progressing and are expected to become operational within the next six months.
• Discussions are underway with Gulf investors to develop large-scale solar power plants, each exceeding 100 megawatts.

HYDROPOWER
Financing has been secured to rehabilitate the Nahr el-Bared hydropower plant, as well as three additional hydropower facilities on the Litani River (Abdel Aal, Qaraoun, and Shaar el-Hello), with funding from the World Bank.
Renewable energy promotion remains a long-term strategic priority.

Third Pillar: Transition to natural gas

The transition to natural gas is a key objective due to its economic and environmental advantages, with an emphasis on diversifying supply sources to avoid dependence on a single route.

ARAB GAS PIPELINE
Efforts are underway to reactivate the Arab Gas Pipeline, in coordination with Jordan, Syria, and Egypt:
• Jordanian technical teams have assessed the Lebanese segment of the pipeline from Deir Ammar to the Syrian border.
• Costs and timelines for rehabilitating the Lebanese section are now known.
• An assessment of the Syrian segment is expected imminently.
• Memoranda of Understanding have recently been signed with Egypt and Jordan, and a quadripartite meeting is scheduled.

FSRU
In parallel, there is a study underway on the option of importing natural gas via a Floating Storage and Regasification Unit (FSRU), in cooperation with Gulf partners and the IFC. This would allow gas imports either by land (pipeline) or by sea.

Fourth Pillar: Electricity interconnection

EASTERN INTERCONNECTION
There is work to reactivate the electricity interconnection linking Jordan, Syria, and Lebanon, reaching the Ksara substation. An Arab Fund–financed study is assessing rehabilitation needs in Syria, with Lebanon included to determine costs and timelines. Contractual discussions with Jordan and Syria are expected to follow.

MARITIME INTERCONNECTION WITH CYPRUS
A potential subsea electricity cable linking Lebanon to Cyprus is also under study. The World Bank is financing the economic feasibility assessment. If viable, the project could eventually integrate Lebanon into the European electricity network, as Cyprus is connected to Greece. This initiative remains at the study stage.

Fifth Pillar: Rehabilitation of the electricity grid

The electricity transmission and distribution network requires investments of no less than $500 million, following years of neglect. Grid rehabilitation is essential to distribute power generated by future plants. The Ministry is coordinating with the Arab Fund to finance part of these needs.

Sixth Pillar: Distribution sector reform

The experience with private service providers in electricity distribution has failed to deliver the expected results. As a result, the Electricity Regulatory Authority, with World Bank financing, has begun developing a new national strategy for electricity distribution and public–private partnerships.

Seventh Pillar: Institutional and administrative reforms

REGULATORY AUTHORITY
The Electricity Regulatory Authority was appointed three months ago. Despite lacking offices, salaries, and an independent budget so far, the Authority has begun work, notably on the distribution sector strategy in collaboration with the World Bank. Budgetary allocations have been requested for 2026.

The Authority is also conducting:
• A Least-Cost Generation Study, funded by the French government and conducted with EDF, to define long-term sector needs.
• Financial, administrative, and contractual frameworks governing future relations between generators, the transmission company, and distributors.

EDL BOARD APPOINTMENT
The process to appoint a new Board of Directors for Electricité du Liban has begun. The application deadline was extended by one week, after which interviews will be conducted by a specialized committee. Appointments will be made based on merit and submitted to the Council of Ministers.

ADDRESSING ELECTRICITY THEFT
Approximately 30 percent of electricity is stolen, costing an estimated $200 million annually (based on four hours of supply). This level of loss makes the sector financially unsustainable and deters investors.
The Ministry has coordinated with: Security and military authorities, the judiciary, and Electricité du Liban to pursue major offenders, treating large-scale theft as theft of public funds, subject to criminal prosecution.

PAYMENT OF PUBLIC SECTOR ELECTRICITY BILLS
An agreement with the Minister of Finance, approved by the Council of Ministers, stipulates that:
• 80 percent of electricity bills owed by public institutions will be paid in fresh funds to EDL
• 20 percent will be offset against EDL’s debts to the Lebanese state.
This measure will improve EDL’s cash flow and allow increased fuel purchases to enhance supply.

UPDATING ELECTRICITY LAW 462
Work has begun on updating Electricity Law No. 462, with workshops underway. Proposed amendments will be presented to Parliament’s Energy Committee in due course.

Audit and Governance
In line with the government’s policy statement, a forensic audit of ministries and public institutions will be conducted, starting with the electricity sector. The Ministry is currently preparing the terms of reference. The delay reflects a strategic decision to first stabilize the sector and create an environment conducive to investment.