During the first week of July, Electricité du Liban (EDL) has announced a sharp reduction in power supply across Lebanon, citing, a “severe” decline in fuel reserves. Power generation was limited to just two plants, Zahrani and Deir Ammar, but one production unit at Zahrani has already ceased operation. EDL has prioritized electricity distribution to essential facilities such as Beirut’s airport, port, and water pumps. The decision comes amid a dispute over fuel payments to the Iraqi government.  

The Impact of Power Shortages on Human Dignity

LIMS argued that this situation undermines human dignity by depriving people of basic necessities and reliable services, eroding their standard of living and increasing hardship. The lack of access to electricity affects essential daily activities—such as studying, refrigerating medicines, and operating businesses—further compromising human dignity. The root cause lies in the Ministry of Energy and Water’s persistent failure to address financial losses at EDL despite raising electricity prices precisely to cover the cost of fuel procurement. LIMS explained that 55-60% of electricity generated from Iraqi fuel remains unbilled, uncollected, or is outright stolen. This inefficiency leaves EDL unable to meet its fuel payment obligations, perpetuating a vicious cycle of financial instability.

Rather than tackling the fundamental issues of electricity bills, the ministry has resorted to leveraging the threat of blackouts to pressure the central bank into financing fuel imports using Lebanon’s dwindling foreign exchange reserves. This tactic, LIMS argued, only deepens the country’s financial woes without resolving the systemic inefficiencies plaguing the power sector. EDL’s continued subservience to the ministry and its failure to assert financial autonomy have further compounded these challenges.

LIMS also raised concerns about the procurement of Iraqi fuel, which was initially portrayed by the Ministry as a generous grant in solidarity with Lebanon, later described as a barter agreement for medical services, and is now being presented as a purchase requiring significant payment. LIMS called for an investigation into what it described as a “shady deal,” questioning whether the fuel was genuinely acquired through barter or if it was, in fact, a purchase. In that case, the deal would potentially be in violation of public procurement laws since a specific bidder was chosen without conducting a tender that ensures competition and equal opportunity among multiple potential suppliers.

Private Initiatives on the Local Level

The Ministry’s ongoing struggle to pay for fuel imports from electricity revenues, without relying on additional government or central bank funding, underscores a critical need to decentralize the production of basic services. A shift toward local energy solutions could unlock significant opportunities for entrepreneurs, particularly in the renewable energy sector, by encouraging them to invest in and manage cleaner, more reliable power sources for their communities.

The existing network of private microgrid generators at the local level demonstrates a proven capacity for effective bill collection—something Electricité du Liban (EDL) has failed to achieve over the past three decades. By capitalizing on this local infrastructure, Lebanon could address both energy production and revenue collection challenges simultaneously. This decentralized approach would not only ensure a more stable energy supply but also foster an environment where local businesses can thrive.

For local enterprises, access to reliable energy is fundamental to growth and development. Consistent power supply enables businesses to operate efficiently, reduce overhead costs associated with energy disruptions, and plan for the future with greater confidence. Moreover, the adoption of local renewable energy projects would instill a sense of ownership and pride among entrepreneurs, who would be directly contributing to the sustainability and resilience of their communities.

In the broader economic context, this shift toward localized energy production could act as a catalyst for innovation and investment in the renewable energy sector, creating jobs and stimulating local economy. As businesses become more self-sufficient, they are better positioned to weather economic uncertainties, ultimately leading to a more prosperous and sustainable future for Lebanon’s local economies.

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