Lebanese Central Bank withholds funds needed to operate power stations
The World Bank has revealed that Lebanon's central bank and ministry of finance have failed to disburse necessary funds for the transfer of energy from Egypt
By News Desk - April 09 2022

(Photo credit: Al-Akhbar)

Lebanon’s Ministry of Finance received a letter from the World Bank on 31 March requesting payment for a $78 million debt owed by the Lebanese state power company Electricité du Liban (EDL).

The letter also requested the Central Bank (Banque du Liban), which failed to release the necessary funds to operate the country’s power plants, to allow the conversion of Lebanese liras into dollars for a clear system of payment.

On 23 March, the Council of Ministers agreed to provide the $78 million requested by EDL to operate the Deir Ammar, Zouk, Zahrani and Jiyeh power plants.

However, the decision of the Ministry of Finance and Central Bank to withhold the funds have led to an accumulation of the state power company’s debt, while also impeding progress on the deal signed to provide Lebanon with Egyptian gas through Syria.

The World Bank letter states that “Electricité du Liban must establish adequate operations and maintenance for the Deir Ammar plant, which will receive the Egyptian gas.”

According to the letter, the Central Bank is “aware that the arrears owed by the Corporation (EDL), for the benefit of the company operating the plant, impeded the extension of the contract between the two parties.”

The US-sponsored gas deal was already on hold due to Washington’s refusal to provide Egypt with the required exemption from the so-called Caesar Act in order to sell gas to Lebanon via Syria.

The withheld funds of the Central Bank have created further obstacles as the transfer of Egyptian gas requires funding for the operation and maintenance of the Deir Ammar plant before gas is received.

Lebanon’s energy crisis has resulted in long power outages across the country.

The Islamic Republic of Iran has stated its willingness to build two power plants in Lebanon, each with a capacity of 1,000 megawatts, in order to alleviate the crisis.

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