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Lebanon Approves Electricity Sector Reform Plan

Lebanon Approves Electricity Sector Reform Plan

Monday, 8 April, 2019 - 18:45
The Lebanese government meets at the Baabda presidential palace on Monday. (Dalati & Nohra)
Asharq Al-Awsat
The Lebanese government approved on Monday a plan to restructure the electricity sector that aims to boost generation capacity, while reducing state subsidies that have led to one of the world's heaviest public debt burdens.

Prime Minister Saad Hariri said that the new plan will eventually provide 24-hour electricity to the country's population of over 5 million.

The sector has been deeply dysfunctional for over four decades since the time of the country's civil war.

Hariri urged rapid implementation of the plan through a public tender process to reduce the pressure on the debt-ridden country's finances, saying the state budget "cannot bear delay".

"The problem today is a financial problem and we have to tender out the electricity (plan) as soon as possible," Hariri said, adding this was a "real" step towards reforming the power sector.

Energy Minister Nada Boustani told al Jadeed TV broadcaster the plan was a revised version of an earlier plan the cabinet had approved in 2010, saying the onus was now on implementing it.

"If it goes as expected next year, people will witness a big improvement," Boustani was quoted as saying.

Since the government cannot afford to supply 24-hour electricity, it enforces daily power cuts leaving consumers to pay for expensive secondary supply from local generator companies.

Subsidies to the state electricity company cost the government nearly $2 billion a year.

The plan, expected to get parliament's approval, will reform the state electricity company, introduce new pricing policies and boost power production.

International donor institutions have recommended electricity reform as a major step to deal with the massive public debt, one of the largest in the world, estimated at nearly 150 percent of GDP.

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