Lebanon signs first power purchase agreement

BEIRUT / Reuters

Lebanon has signed its first deal to buy electricity from private companies, the energy minister said, in a model which took years to hammer out and opens the country up to more international investment.
Lebanon has been short of electricity since its 1975-90 civil war. Households experience at least three-hour outages each day. Those who can afford it use generators that cause air pollution to fill the gap. Reforming the electricity sector is top of the International Monetary Fund’s recommendations for revitalising Lebanon’s anaemic economy, where infrastructure development has been hindered for years by political tensions.
Supporting the state-owned power company, Electricite du Liban (EdL), has imposed a big burden on public finances. Under its first Power Purchase Agreement (PPA), Lebanon’s government agreed to purchase 200 megawatts (MW) in total from three Lebanese companies that plan to generate power from wind turbines, namely Hawa Akkar, Lebanon Wind Power and Sustainable Akkar.
Lebanon has a maximum electricity generation capacity of about 2000 MW, while peak summer demand is more than 3000 MW. “Now this process is complete, renewable energy in Leba-non through private sector investment becomes easier to do,” Hawa Akkar Chairman Albert Khoury told Reuters. This year, Lebanon will seek international aid and investment at conferences in Rome, Paris and Brussels to support the economy and its army, and to help it deal with about one million Syrian refugees in the nation, whose own population is around 4.5 million.
Investors want Lebanon to create a more transparent and secure investment environment. The European Bank for Reconstruction and Development, which recently began to work in Lebanon, is among those seeking to help finance power and other projects. “The EBRD has been working very closely with all the parties involved in the PPA,” an EBRD official said, adding the bank was “looking forward to investing in wind projects as a consequence of having this PPA structured properly.”