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Politics of Reform in Lebanon’s Electricity Sector

Politics of Reform in Lebanon’s Electricity Sector

By now, it can be confidently said that corruption in the electricity sector has been a major constraint to the economic and social progress in Lebanon. The electricity sector’s inefficiency and dysfunction mask deeper political economy challenges including rampant rent-seeking, a fractured institution, and captured institutions.

The share of the electricity sector spending, with its subsidies since 1992, has accounted for $40 billion, which is around 40% of the Lebanese government’s debt.

Over decades, mismanagement, and corruption in this sector, along with many other sectors, has contributed to tpohe draining of public finances and deprived the residents of Lebanon of their right to affordable, and reliable electricity. When the uprising of Lebanon in October 19 took place, what remained of the electricity was a focal point of the public grievance, and remained a central concern amidst the economic crisis, as the sector was not getting any better but rather worse. 

Lebanon’s electricity performance became dismal. The Èlectricitè du Liban, or what is known as EDL, is the state utility, and covers only 63% of the electricity demand, which lead to rotating outages. The outages last longer as one moves away from Beirut, widening the developmental and social inequalities. There are high non-technical and technical losses in power, leading to a third of EDL’s total generation. Prices have not been adjusted since 1994, which makes EDL’s losses huge where almost more than half of Lebanon’s national debt comes from these losses caused by this state utility.

A major consequence that stems from this dysfunction in the sector has led to the emergence of thousands of private generators all over the country to provide power to businesses and households when EDL’s power is not available (which is almost all the time). This illegal, informal, and unregulated scattering of generators provides a high-cost, variable, and low-quality service. In many places all over Lebanon, generator owners are seen as “mafias” that are both contributors, and part of the political business system in Lebanon. 

Building back the electricity sector means securing affordable, sustainable, secure, and cleaner energy to the Lebanese people. It also means enacting policy that will reduce the likelihood of future shocks and increase the sector’s resilience to crises (such as the economic crisis that the country is currently facing). While the sector has been extensively studied and the solutions are widely available and understood, the lack of trust in the political class, and the lack of the political will to implement these solutions remain the main issue in this sector. 

Next time you are in front of the ballot box, remember all the times you’ve had to sit in complete darkness, the times you had your phone off because it ran out of battery, the nights you had to spend dripping in sweat because you could not turn your AC on, and the list goes on, decide to make a better choice for yourself, and for the people of your country!

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