Lebanon Businessnews News

Cabinet approves
nationwide electricity plan
Power plants will be established

according to ‘build-operate-transfer’ model

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The Cabinet has approved by consensus a plan to upgrade the electricity sector by terminating its deficit, reducing waste, improving production and distribution, and raising tariffs. The plan’s execution will cost $2 billion annually.

The Cabinet tasked the Ministry of Energy and Water (MoEW) to prepare terms of reference for all the tenders for upcoming power plants in collaboration with international technical and legal advisors.

Tenders will be held through the Central Inspection Bureau Tenders Department. Law 288, which authorizes the private sector to generate power, has been extended for three years.

Power plants will be established according to the build-operate-transfer (BOT) model. Under BOT, the contractor will build and operate the plants, and hand them over to the State after the contract expires.

The Cabinet approved the production plan, which calls for the construction of new power plants over 2019-2025. This includes establishing a 500-600 megawatt (MW) plant in Selaata, 500-600 MW plant in Zahrani, 500-600 MW plant in Zouk, 500-600 MW plant in Jiyeh, and 300-350 MW plant in Hreicheh for a total of 2,300-2,750MW.

The Cabinet approved ‘temporary’ plants in Zahrani, Deir Amar, Jiyeh, and Zouk, in addition to the need to improve supply in Bint Jbeil and Jeb Jennine. It also approved merging tenders of permanent and temporary plants.

The Cabinet approved the dismantling of old plants in Zouk, Jiyeh, and Hreicheh and launching tenders to replace them simultaneously.

The Cabinet commissioned the Minister of Energy and Water to negotiate with hydropower concession holders to adopt solutions presented by the World Bank. It called for completing renewable energy tenders prepared by MoEW.

In transmission, the plan sets a goal to reduce waste from 34 to 25 percent by the end 2019, and reaching 12 percent by the end 2021. It also calls for expanding the transmission network to cope with the upcoming production.

The MoEW will ask security forces to help Electricité du Liban’s (EDL) employees in finishing the following tasks: Completing the 220 Kilovolt (Kv) loop in Mansourieh, completing the 66 KV network in Bikfaya, Feytroun, and Halat, and completing the 66 KV network between Kobayat, Hermel, and Tyre.

The Cabinet approved securing financing through donors for the establishment of transmission stations and lines. The cost for the next two years will be: LL405 billion ($268 million), and LL298 billion ($198 million) respectively.

The Cabinet approved allocating a land plot in Furn El Chebbak to establish a 220 Kv transmission station and two other land plots in Tahweetat El Ghadir to establish a 220 Kv station.

In distribution, security forces will be asked to help employees of the EDL and electricity service providers to carry out their tasks including the installation of smart meters and the removal of violations.

As for collection, the Ministers of Energy and Water and Finance were tasked with collecting bills from public administrations and municipalities. These bills are valued at LL1,820 billion ($1.2 billion). The Prime Minister and Minister of Foreign Affairs are required to cooperate with UN Relief and Works Agency for Palestinian Refugees (UNRWA) and donors to collect the bills of Palestinian camps, valued at LL444 billion ($294 million). They also have to coordinate efforts with donors to fund the electricity cost of Syrian refugees.

The Cabinet approved raising tariffs in parallel to the increase in production and linking it to the price of fuel in collaboration with the World Bank.

The Cabinet approved MoEW’s request to appoint a new board for EDL.
Reported by Yassmine Alieh
Date Posted: Apr 09, 2019
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