Lebanon Businessnews News

Power cuts to increase this summer
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Electricité du Liban (EDL) may reduce electricity production this summer if a budget shortfall isn’t resolved, according to its Chairman Kamal Hayek.

The EDL requested LL2,800 million ($1.85 billion) in State subsidies in order to provide 16 hours of power to areas outside Beirut. But Parliament, in the 2018 State budget, allocated just LL2,100 million ($1.4 billion), when the cost of oil stood at $65 per barrel. The cost of oil has since climbed to $75 per barrel, which means power supplies to areas outside will be reduced from 16 hours per day to 13 hours. The greater Beirut area is exempt, and will continue to get 21 hours of electricity.

Demand for power increases from 2,100 megawatts (MW) to 3,400 MW during the summer, further complicating matters for the state-owned energy provider.

The EDL provides 20 to 22 hours of electricity outside the summer season, if it buys electricity from Syria and power barges are fully operational.

There are three viable options, according to Hayek: “The first is to increase subsidies so that we can operate our backup plants in Tyr and Baalbeck and buy 120-176 MW from Syria. The second is to increase the tariff. The third and most unfortunate option is to increase power cuts if oil prices remain as is.”

The third option is the most likely scenario, he said, because there are hurdles to the first two options.

The presence of Syrian and Palestinian refugees has further strained the country’s infrastructure and budget, Hayek said. Additionally most public administrations do not pay their bills either, and power concessions in Jbeil and Zahle buy electricity from EDL for a tariff that is lower than the regular one.
Reported by Yassmine Alieh
Date Posted: Jun 05, 2018
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