Lebanon's Electricity du Liban to receive $200m funding boost amid large-scale blackouts

EDL has been rationing the power supply in Lebanon for weeks, leaving many with under six hours of electricity per day

Facade of Lebanon's electricity company in Beirut, Lebanon March 26, 2019. Picture taken March 26, 2019. REUTERS/Mohamed Azakir

Lebanon's Parliament on Monday approved $200 million in financing for state-owned electricity company Electricity du Liban (EDL), as the country's residents endure blackouts lasting hours.

EDL has been rationing power supplies in recent weeks, blaming a funding shortage.

For the past few days it also said  a Kuwaiti gas oil shipment had been held up by the cargo ship that blocked the Suez Canal for almost a week.

Kuwait’s state-owned oil company KNPC is now Lebanon’s only national supplier of fuel, after EDL’s contract with Algeria’s state-owned oil company Sonatrach ended last year.

To make up for the shortfall in oil deliveries, Lebanon has been purchasing fuel from the spot market, which requires upfront payments in foreign currency.

Delays in the approval of payments and doubt over the quality of imported gas oil have delayed the delivery of spot cargoes, which led to a halt in production in the Zahrani plant in south Lebanon, EDL said on Sunday.

EDL has since been rationing power supplies across the country, providing as little as three hours of electricity a day in many parts of Lebanon.

Experts warn the country could face a complete power blackout if the government fails to pay money owed to private contractors – including service providers that collect EDL's bills and maintain the power grid, as well as power plant operators.

Lebanon’s electricity sector has been dysfunctional since the end of the civil war in the early 1990s.

EDL still provides power at subsidised tariffs that are a third of production costs.

Its subsidies have cost the government an annual $1.5 billion in recent years, though most Lebanese households get as little as three to six hours of electricity a day.

To maintain an uninterrupted power supply, Lebanese pay local operators of private generators to make up for the shortfall.