Lebanon's electricity crisis has pushed it to the brink of financial ruin, ...
BEIRUT - Lebanon’s electricity crisis has pushed it to the brink of financial ruin, as power cuts hobble the economy and subsidies have racked up one of the world’s largest public debt burdens.
The largely unregulated neighborhood suppliers, responsible for a web of power cables slung across city streets, are popularly called the “generator mafia” for their supposed political clout. The owners say they simply offer a service that the state can’t. The government says net transfers to state power firm Electricite du Liban now amount to $1 billion-$1.5 billion a year, most of it spent on fuel oil. This is equivalent to about a quarter of last year’s budget deficit of $4.8 billion.
Relying on fuel oil power plants and diesel generators also comes with a health cost: air pollution that can cause respiratory disease. Air pollution in Beirut was three times levels deemed a hazard by the World Health Organization, according to 2014 data.Consumer power prices have not changed since 1996, when oil cost only $23 a barrel. Crude now trades nearer $70. But asking people to pay more when the service is so poor is a tall order.
Distribution and revenue collection are also big problems. EdL collects payments for only half the power it produces, with some power lost through creaking transmission network and other supplies siphoned off the system through unauthorized cables. Even with a government in place, it has few resources to spend on power infrastructure when nearly half of state revenue is needed to service public debt.
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