Lebanon’s electricity collapse has left households paying twice for power: once to the state utility, Électricité du Liban (EDL), and again to private diesel generators. EDL’s costs remain inflated by chronic non-collection, with unpaid bills reaching as much as 40 per cent of total dues. Generator operators, by contrast, collect far more effectively, but operate in an informal and legally precarious market, with high fuel and generation costs.

The newly appointed Electricity Regulatory Authority (ERA) has been tasked with unbundling and privatising the sector. Yet LIMS warns that, without credible bill collection, privatisation risks becoming a paper exercise. No private investor will commit capital where revenues cannot be secured. Restoring collection is therefore a precondition for reform.
 
Over the past decade, solar power in Lebanon has moved beyond rooftop panels to community-scale projects supplying entire villages. This expansion has been accompanied by experimentation in commercial models, particularly in billing and payment. Local operators have tested net metering, prepayment and smart meters, often achieving stronger cash flow and service continuity than the central utility.
 
These experiences highlight a structural distinction that reform has largely overlooked. Electricity distribution and retail supply require different capabilities. Distribution depends on engineering expertise in networks and substations; retail supply depends on customer management and the ability to collect bills. LIMS therefore argues for unbundling distribution from retail supply, allowing entities with proven collection capacity to operate as retail suppliers. Those suppliers would buy electricity from power producers and sell it to end-users at the retail level. They would collect bills from consumers and remit payments to generators, transmission and distribution companies. Stronger collections would support more reliable fuel procurement, extend EDL’s supply hours and provide a credible foundation for privatisation.
 
The ERA could also use its regulatory leverage to bring diesel operators into the formal system, encouraging them to diversify into renewables in exchange for legal recognition. Over time, a hybrid model combining local renewable generation with diesel backup could improve reliability, reduce balancing costs on the national grid and defer the need for large-scale generation investments. Formalisation would allow the regulator to impose oversight and higher standards, while leveraging generators’ existing billing networks and their potential role as backup providers for renewable systems.
 
This shift towards local solutions extends beyond electricity. Across Lebanon, municipalities are increasingly stepping in to provide water and waste services, often stretching beyond their formal mandates and limited budgets. For LIMS, the trend reflects a deeper reality: repeated failures of central planning, compounded by political interference, have hollowed out basic services. Empowering local actors, supporting initiatives at the municipal level and embedding them in a pragmatic regulatory framework may offer a more credible path to restoring Lebanon’s infrastructure than another round of grand, centrally designed reforms.

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