Lebanon averts nationwide blackout by paying part of debt

Country's two working power stations were set to close on Wednesday because operator had not been paid

An overnight nationwide blackout of state electricity in Lebanon was averted after authorities paid off some of the debt it owes to the operator of the country’s only functioning power plants.

On Wednesday, Lebanon’s state electricity company announced that the Zahrani and Deir Ammar power plants would close at 5pm because operator Primesouth had not been paid — in dollars — by the government.

The two power stations, which are alternated to ensure there is enough fuel to prevent a nationwide blackout, are the only ones still operating in Lebanon.

But about an hour after the power was cut, Electricite du Liban said it had been told by Lebanon’s central bank that some of the debt had been paid.

The EDL said it had asked Primesouth to immediately put the Zahrani station back on line.

It also said that Deir Ammar would resume operations at 2pm on Thursday to increase the power supply for the Eid Al Adha holiday.

The payment to Primesouth had already been approved by the Council of Ministers in April and May, said Walid Fayad, Lebanon’s Minister of Energy and Water.

Mr Fayad said the delay in the payment was because the central bank was seeking extra assurances from the Finance Ministry that the funds would come from the Special Drawing Rights that Lebanon received from the International Monetary Fund last year.

“This was not needed because it was all stipulated in the Council of Minister’s decision and all the paperwork was done appropriately and accordingly,” Mr Fayad told The National.

“With the interventions at the last minute, we were able to convince the head of the central bank to make the payment without further waiting.

"It had been in the works for a long time and there was no justification for more waiting. The Council of Ministers decision dated back to April.

"It was followed by another decision in May, all supporting the payments to make sure that the operators could continue."

The EDL earlier said: “The non-payment to the operator will cause the latter to shut down the Zahrani and Deir Ammar power plants, which will cause the total blackout of electricity throughout Lebanon and in all essential institutions, such as the airport, the port or the hydropower plants.”

It said the government had, since the start of the year, spent “only $60m for the instalments expected by all EDL contractors, an amount which is not sufficient to accomplish a minimum of the required operations".

It is unclear exactly how much the government owes.

The EDL is providing only a couple of hours of power each day to households, or less than 10 per cent of the country’s power needs.

Lebanon is suffering from a devastating economic collapse that has led to the local currency dropping in value by more than 90 per cent and plunged much of the population into poverty.

There are widespread shortages of water, power, medicine and other basic supplies.

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Workers remove sections of the concrete barrier, which was erected by Lebanese security forces in 2020 to bar access to streets leading to the country's parliament building, at the entrance of the Lebanese Parliament in the capital Beirut. AFP

Many people have been forced to use expensive private generators to up their electricity supply.

Last month, Lebanon signed a deal to import 650 million cubic metres of gas from Egypt through Syria, adding about another four hours a day to the ailing power grid.

The deal is expected to last for an initial 10 years but it still needs US approval to ensure it does not breach sanctions imposed on Syria.

The agreement also requires the support of the World Bank, which it said would provide financing.

Primesouth and the Energy Ministry have been contacted for comment.

Updated: July 07, 2022, 10:07 PM