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Electricity crisis in Lebanon: ‘Tragedy strikes’ | Business and Financial Issues

Beirut, Lebanon – Lebanon’s electricity sector is on the verge of collapse, and the government continues to waste money instead of repairing it.

The state producer Électricité du Liban (EDL) ran out of money to buy oil, so the government sent a letter to the central bank for improvement from its dry land.

A source from the energy ministry told Al Jazeera that the future is worth $ 200m. The cost of the central bank, which is estimated to be more than $ 15m, is declining rapidly, and the costly and inefficient electricity sector is the cause.

Commenting on the May 2020 issue for global suppliers, Energy Minister Raymond Ghajar said the demolition of the electricity sector was costing about $ 1.6bn in government revenue each year, although some reports said it could rise to $ 2bn. This is about 3 percent of all the wealth in the country, and experts told Al Jazeera that only about half of the world’s debt owes people.

“When there is no political response, we are simply addressing the issue,” Marc Ayoub, an energy researcher at the Isam Fares Institute at the American University of Beirut, told Al Jazeera. “If we pay $ 200m [pounds], we continue for two or three months, so what? We cannot continue like this. ”

Economic hardship

Other methods of contraception have failed or failed, especially the oil and medical agreement in Iraq, where it is said that for security reasons the acting Prime Minister Hassan Diab did not travel to the country to seek the agreement in late April. On Tuesday, Hezbollah Secretary General Hassan Nasrallah said the Tehran-backed group was ready to negotiate and buy oil in Iran.

Lebanese households for nearly 30 years allow daily power cuts that last three hours in Beirut, although power cuts elsewhere often last longer.

Those who can afford it offer password generators to increase power. And despite the poor performance, the government continued to promote the system: supplying oil and retaining its swollen people, whom human rights activists and experts say are part of a political party.

While citizens and legal experts alike have criticized the country’s inactive electricity sector, Lebanon’s struggling economy has raised concerns that it will not be able to turn on electricity. Lebanon is struggling financially, with local currency losing about 85% of its value and food prices among the world’s largest prices.

Today, power outages are rampant, even in some of the capital’s most affluent areas. The electrical equipment shuts off, the oil runs out. In some cases, EDL may not be able to pay for fuel from oil tanks that have already arrived in the country. Recently, Turkey’s Karpower shut down two floating trains – which provided electricity to the country – for debt repayment.

Manufacturers of generators are now said to be struggling to cope with rising costs and cost. One distributor, Kassem, told Al Jazeera that they are starting to buy oil at special prices on the black market, amid a decline.

“Power cuts in Beirut were three hours but beating 12 hours sometimes,” he said anxiously, noting that most generators heat up to about six hours. “The weather is good right now, but as soon as it’s hot, people will increase.”

And, as elsewhere in Lebanon’s precarious markets, Kassem said the rise in prices was about to reverse fuel prices and repair generators. “We will not be able to fill the vacancies left by the government. To think that we can remove electricity from the state almost completely with generators is absurd. ”

Lebanon has asked other countries to invest about $ 5.6bn in upgrading its electricity sector [Aziz Taher/Reuters]

Valueless promises are your preferences

For more than a decade, Lebanese officials have promised reforms that will protect uninterrupted power supply and prevent waste of public funds. Whether it brings in more energy, fuel efficiency, and investment in solar power, wind farms and electricity, governments will have a vision to reduce and improve the old-fashioned sector.

Many of these commitments were based on a “2010” interest-seek letter from then-energy minister Gebran Bassil, which he said would reduce losses from the party to zero by 2014. Bassil also said in his paper that the changes could make a significant contribution by 2014. 2015.

Bassil’s successors are often from the same party he leads, the Free Patriotic Movement, and have since forced the movement into government and international affairs. His most recent restoration was in April 2019.

Nothing much started to work, other than bringing two Turkish electric trucks. Earlier in the day, barge would still remain in Lebanon to this day. Despite the financial crisis and the failure to implement the plans, Lebanese officials remain steadfast, unwavering.

“The ministry often has the impression that they have their own required documents and do not need to look elsewhere,” Jessica Obeid, an independent human rights adviser, told Al Jazeera. “This is difficult because at one point the ministry began to follow the principles rather than finding another way to supply electricity.”

Implementing the system is expensive from start to finish; Meanwhile – Energy Minister Bassil said the government would provide $ 1.55bn, financial institutions $ 2.32bn, and total $ 2.65bn from overseas.

As the country’s economy deteriorates since then, Lebanon in 2018 asked other countries to contribute about $ 5.6bn in energy sector development at an international conference in Paris. The international community has urged Lebanon to make economic reforms and to hold accountable billions of dollars in aid for development.

A source in the ministry of energy told Al Jazeera that the current government, which specializes in human rights, has been arrested.

“[The caretaker government] they cannot make decisions on economic matters, ”said the source. “The biggest obstacle is [the lack] of a permanent government. ”

‘Do Not Replace the Wheel’

Lebanon has been without a government for 10 months, and ongoing conflicts between President Michel Aoun and Prime Minister-elect Saad Hariri have created a major crisis. Even French President Emmanuel Macron, who has promised to secure development aid, will not be able to stop the trade.

But Obeid and other analysts say the system of power-sharing in the country is being built on “their own agenda”.

Even the electronics industry or companies involved in development projects are linked to the country’s politics. One of the most notable was the power plant north of the town of Selaata in late 2019. The town is not on the grid, and human rights activists and politicians also criticized the FPM Ministry of Energy for plotting the site for its political purposes, given its place in the Christian town.

Although the plant was widely opposed even by the country’s ruling political parties, it continued to be strongly encouraged by the idea of ​​renewable energy in Lebanon as early as May 2020. As of September, even French President Emmanuel Macron has said he wants to abandon plans for a power plant.

The Électricité du Liban itself is a political entity. One year ago, the government elected its new superintendents through a period of non-alignment with sectarian groups.

Marc Ayoub, an electrical researcher, said there are many possible ways to deal with these problems. “We are not reversing the wheel here,” he said, adding that any solution to Lebanon’s energy crisis was also to reshape the economy. But will the leadership of this country provide an opportunity for biased political leaders?

“Everything we think, is against the interests of political leaders,” added Ayoub. “We’re telling them to stop benefiting from something they’ve been benefiting from for 20 years.”

At the same time, all executives and experts do not expect any investment in Lebanon to restructure their uninterrupted power supply without the financial system approved by the International Monetary Fund, although negotiations have not resumed nearly a year since the collapse in July 2020.

How long will Lebanon continue to generate electricity while its current system produces the few that remain of the economy? One year, Obeid said.

“At the moment we are moving, I think he will continue to destroy any remnant of investors,” he said. “It’s hard to make.”

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