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Energy plan approved by Lebanese government

Energy and Water minster hopes to end power rationing by 2014.

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Lebanon's energy and water minister wants to end power rationing with his investment plan.
Lebanon's energy and water minister wants to end power rationing with his investment plan.

Lebanon’s cabinet has approved a plan by energy and water minister Jebran Bassil that aims to end power rationing by 2014, writes the Lebanese paper The Daily Star.

The plan calls for allocating US$4.870 billion to boost power production from 1,500 MW to 4,000 MW in 2014.

Out of this $4.87 billion, the state will spend $1.55 billion, the private sector $2.32 billion and the remaining $1 billion will come in the form of soft loans from the donor countries.

The plan calls for investing another $1.650 billion in the long run so Lebanon can produce 5,000 MW of electricity.

“If we provided 24 hours of electricity and raised slightly the bill on consumers then Electricite du Liban (EDL) will start making a profit for the first time instead of suffering constant deficit,” Bassil said.

The report warned that if this plan were not adopted in full then the EDL would continue to bleed financially and total accumulated losses in 2015 would reach $9.5 billion.

The plan also calls for investing in convertible energy or substitute energy such as wind run power mills and recycled trash. This alternative energy will produce nearly 12 percent of the total power generation in 2014.

Bassil is banking on most of the new power plants running on gas either from a pipeline crossing into Syria or liquefied natural gas (LNG) that will be delivered to specialised ports in Lebanon.

Bassil has had to take into account fierce opposition by unions and opposition parties against previous plans to reform the energy sector through privatisation, persuading them that the private sector could play a role in building the power stations, but without agreeing to sell them to private companies.

Chafic Abi Said, the former head of research at EDL, told The Daily Star he saw both positive and negative points in Basil’s plan.

“The positive thing about the new plan is that it has dropped the idea of using coal to generate electricity and adopted the concept of natural gas instead. The other positive point is that the minister called for the amendment of Article 486 of the electricity law and this indirectly means privatization of some of the utilities and also means that the state is no longer obliged to hire more people for EDL,” Said told the paper, adding that the government should set up a regulatory authority for the power sector.

But Said was skeptical about the Bassil’s ability to implement his plan by 2014.

“The government will be obliged to make a tender and a book of conditions for the companies that will take part in the construction of new power plants. This process alone will take more than 18 months if the intentions are true,” he said.

The minister himself has been reluctant to confirm that the electricity problem would really be solved four years from now. “Only tangible results will show whether this plan will materialise. If there is a political will then we will see 24 hours of electricity few years from now,” Bassil said earlier. His caution reflects the hard and bitter reality in Lebanon, where rival politicians bicker over every plan to end the long-running electricity crisis.

Said added that experience showed companies and the government never meet the deadline for the construction of new power stations. “I think it will take more than four years to build one power plant in Lebanon. Good intentions are not good enough,” he said.

He also cast doubt on the government’s ability to build renewable energy in a short period of time. “But I was glad that the Energy Ministry has encouraged the use of energy saving bulbs for households and investment in solar energy in houses,” Said added.
 

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