Updated Policy Paper for the Electricity Sector, March 2019...

Executive Summary

The Policy Paper for the Electricity Sector that was endorsed by the Council of Ministers in 2010 depicted the necessary initiatives needed to reform the Lebanese Electricity Sector in order to ensure a reliable electricity supply and quality of service while ensuring a balance in the sector’s fiscal budget and the elimination of its deficit.

The financial deficit of the Electric Utility EDL - Electricité Du Liban reached 1.8 billion $ in 2018. Many factors contributed to this situation; including: The freezing of the tariff at a level below the average cost of production, the operation of old power plants having low efficiencies and high operating costs, 16% technical losses, 21% non-technical losses and the burden of the Syrian refugees whose consumption has been estimated to be around 500 MW. All these factors, and the prevalence of many of these for the past 25 years, resulted in a cumulative debt of 30 billion $.

Regarding EDL’s financial deficit, most of the financial contribution made by the Government of Lebanon – GoL to EDL is being used to purchase fuel and cover for both tariff subsidy and electricity consumption of public sector establishments.

Against this background, the Ministry of Energy and Water – MoEW has been working in cooperation with the World Bank on updating the Electricity Policy Paper to achieve two main targets of reducing EDL’s financial deficit and improving the electricity supply. These will be achieved in the short & long term through fast track public & transparent tenders that will be launched for the supply of electricity in partnership with the private sector at competitive prices with minimal environmental impact.

The proposed solution integrates three ingredients that shall be worked upon in parallel:

1- Decrease of the technical and non-technical losses along with the collection improvement.

2- Increase the generation capacity, improve efficiency and reduce fuel cost by using Natural Gas – NG.



3- Increase the tariff.


The plan will adopt the highest standards for transparency and competitiveness using an international bidding process that will ensure a fast supply of clean electricity at competitive prices. For this purpose, a temporary short term solution and a permanent long term solution will be merged into a single transaction.

Hence, the proposed solution shall incorporate both the short term and the long term components in addition to the three ingredients of the integrated solution which are: the generation plan and technology, the fuel sourcing strategy and the type of fuel used, in addition to strengthening the grid at the proposed sites. The Ministry of Energy & Water has the sole prerogative of moving forward with the short term solution or the long term solution or with both together, in addition to adopting some of the solution ingredients or altogether.

Starting in 2020, temporary power plants of 1,450 MW generation capacity will be deployed for a period ranging between 3 to 5 years. These plants shall be added to specific sites suitable for fast power evacuation as shown in the table below. In parallel to the above, permanent plants will be constructed at the sites of Selaata, Zahrani and Hrayche.


Ministeryof Energy and Water

       Nada Al-Boustani