Reports have emerged about the Central Bank of Lebanon agreeing to grant Electricité du Liban a loan of $300 million to secure fuel and operate the plants, with the caveat that this loan is experimental. This means that if the institution repays it, the Central Bank will offer additional loans. However, there are concerns that this loan might be similar to previous ones, which Electricité du Liban could not repay.
Ghassan Baydoun, former General Director of Investment at the Ministry of Energy, pointed out that if fuel worth $300 million is purchased, it would translate to 6 to 8 hours of electricity supply for a period of 6 months. In an interview with the electronic newspaper “Anbaa,” Baydoun noted that the loan came after imposing a condition to raise tariffs, under the assumption that it would increase Electricité du Liban's revenues, enabling it to repay the Central Bank. However, he argues that this will not happen.
Baydoun explained that the percentage of technical and non-technical losses is extremely high, ranging between 60% and 70%, meaning that Electricité du Liban would only collect more than 40% of the value it produces at best. He added that overdue receivables would delay the impact of tariff increases on revenues since some subscribers pay bills for previous years that are still priced according to the old tariffs.
In this context, Baydoun stated: “The new bill receivables subject to the new tariff will be collected by Electricité du Liban after years, not today. Hence, the institution will not be able to repay the loan to the Central Bank on time in a few months. At that time, the failure of the plan will be revealed, and the institution will be unable to procure more fuel. Thus, the tariffs will remain high, and supply will be nearly absent, as is the case these days.”
Moreover, Baydoun considered that the entire plan aims to prop up a bankrupt institution, representing a government move to show the IMF that Lebanon is undertaking reforms, yet it is an empty step that citizens will bear the burdens of, as they will pay monthly bills of at least 300,000 LBP without any supply.
The series of scandals does not stop here; according to Baydoun, the plan to raise tariffs includes a fee for rehabilitation that has come into effect, which should only be established by law, yet such a law does not exist within the institution’s regulations, rendering it illegal and described as a "militia-like" action. Additionally, it does not correspond to the supply hours that should be increased.
Baydoun added: “The second violation consists of imposing VAT on the rehabilitation fee, knowing that it is illegal to impose a tax on a tax; it should be imposed on the service and production. Furthermore, this added tax does not benefit the Ministry of Finance but remains in the coffers of Electricité du Liban, while at the same time, the institution does not impose any added tax on contracts with the companies it deals with.”
A cloud of uncertainty pervades every aspect of the daily lives of the Lebanese, and electricity is not the least of these issues, but it is among the most critical. Promises are no longer trustworthy for citizens, especially since most of them were "promises with no follow-through."
