Lebanon to take $116m loan for electric power plant

BEIRUT (AP) – Lebanon’s interim government approved Wednesday the release of a $116 million credit line to help repair the state’s crippled power grid.

For more than two years, the country has been struggling with cash and the severe power outages that have crippled many people’s lives, and widened the scope of the economy, pulling three -quarter of the country’s population in poverty. Currently, households receive only one hour of state-run electricity per day, with millions relying on expensive private construction equipment to save their houses.

Lebanon’s state-owned electricity company has been draining government funds for years, costing the government $40 billion and annual losses of up to $1.5 billion. The country’s two largest power plants have broken down at times and require intensive maintenance. According to the World Bank and the International Monetary Fund, the reorganization of the country’s energy sector is a key change for the country to pull out of the mud. Lebanon relies on renewing a oil trade with Iraq.

The government of Prime Minister Najib Mikati agreed to open a credit line of $62 million for the loading of oil at the port, and an additional $54 million for the maintenance of the port. Zahrani and Deir Ammar power stations.

“If we don’t agree on this, we won’t have oil by the end of the week, especially with the late arrival of Iraqi oil,” Mikati said at a press conference. after the meeting. “I believe that if we succeed in solving the electricity problem, although I believe that we are at the beginning, we will solve more than 50 percent of Lebanon’s problems.”

Kamal Hayek, the chairman of Lebanon’s state electricity company, told reporters that the crippled company has 800 billion Lebanese pounds in the central bank that lost value over time. the economic crisis is due to the reduction of the national currency, falling from more than $ 500 million before the crisis. about $16 million. He urged the central bank to allow them to convert the money into dollars so that it can be spent on the company. The pound has lost over 90% of its value against the US dollar since 2019.

Many in Lebanon have blamed its ruling leaders for the national emergencyaccused them of many years of increased corruption and poor financial management. Experts have criticized the state-owned electricity company for wasting money and lack of transparency and have been calling for restructuring for years to make it more efficient and transparent.

Lebanon last year signed two World Bank agreements and Syria, Jordan and Egypt. The plan would bring Jordanian electricity and Egyptian natural gas through Syria on the condition that Lebanon raise its state electricity tariffs and establish a regulatory authority as part of general change of groups. The World Bank has not signed off on the deal to implement it, as Lebanon has not yet established a regulatory authority for its state-owned electricity company.

Leave a Comment