Electricity reform is one of Lebanon’s greatest challenges. The failure to ensure reliable electricity supply becomes the biggest burden on the everyday life of its citizens. Electricity reform is a multi-dimensional process. In addition to technical solutions, reform requires strong advocacy among the country’s political leadership and civil society.
Considerable investments are necessary and would require the involvement of the state, private sector and international donors. An ambitious reform program could set an example for the rest of the region, also tackling electricity challenges. Electricity reform is a vital part of Lebanon’s economic, social, and political stability. The lack of reliable electricity acts as a constraint on business and prevents economic expansion.
Due to bad governance, the Lebanese Electric Power Sector (LEPS) is still facing complex of technical, financial, institutional, and legal problems. Large number of books, studies, papers, plans was developed to deal with these problems whereas the latest comprehensive plan was the Policy paper approved by the Lebanese government on June 2010. With all this effort, the Power Sector debt constitutes more than 35 % of total governmental debt and reached 52 % of total budget debt for year 2014. The problem of insufficient supply is still growing (average of 14-18 hour of supply) with high cost of electricity production (50 % of production is based on diesel, and other 50% is being produced by old inefficient power plants). The Lebanese Grid has number of bottlenecks at transmission and distribution levels associated with high technical losses (15- 20 %). The customer services are still far from being benchmarked, and the non-technical losses are in the range of 35-40 % and contributing to annual debt above 2 billion USD. The financial impact of the sector on Lebanese citizens is tragic (double services for EDL and private generators) and the impact on Lebanese Economy is terrible due to the high cost of unserved energy. Institutionally, the sector is managed by “Electricite Du Liban-EDL” with severe administrative and resources constraints. Legally, privatization law was not applied since its approval in year 2000 by Lebanese Parliament, and the work done for law amendment was completely frozen.