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French Version

Siniora: Lebanon needs more power plants to meet demand

State-owned utility lost whopping $1.2 billion in 2007

Prime Minister Fouad Siniora said Tuesday that Lebanon needs to build more power plants with the help of the private sector to meet the increasing consumption.

Speaking at the opening of a special meeting at the Grand Serail on energy saving, Siniora told participants that the existing power plants have a maximum annual capacity of less than 2,000 MW and Lebanon needs at least 2,500 MW.

"Some of the power plants here are either obsolete or poorly maintained and this poses a big problem for the country," Siniora said.

The government of then-Prime Minister Rafik Hariri spent $1.4 billion in 1994 to build new two new power plants and rehabilitate existing ones.

But despite this massive cash injection, the country continued to experience regular outages.

Experts argue that Lebanon will continue to suffer losses in the electricity sector if it fails to find alternatives to the fuel oil which fires all of the power plants, incuding those designed to run on gas. Syria was supposed to supply Lebanon with liquefied gas through a pipeline to run the Beddawi and Zahrani plants.

But Syria did not meet its obligations in 2002, claiming that technical problems had prevented it from supplying Lebanon with natural gas.

"About 90 percent of the power plants use fuel oil, which is imported from abroad at very high prices," Siniora said.

The premier added that at least two power plants need to be replaced, while others need to be modernized.

The prime minister said the state-run utility, Electricite du Liban (EDL), is draining the financial resources of the Treasury.

"In 2007 alone, EDL suffered a loss of $1.2 billion and the Finance Ministry was compelled to cover this deficit," he said.

EDL officials say that more than 70 percent of the bill goes to cover purchases of fuel oil.

Siniora said EDL's total losses represent a third of the entire public debt, which is currently estimated at $41 billion.

He added that the government is subsidizing EDL's losses so that the citizens will not be obliged to pay the difference.

"We are bearing the biggest chunk of the electricity bill to reduce the pressure on the citizens," Siniora said.

He added that the government planned to ask the private sector to take part in the construction of new power plants.

"We have to invest at least $1 billion in building new power plants and I think the private sector can take this responsibility from the shoulders of the government," Siniora said.

The government planned to privatize the electricity sector to reduce the losses. However, this plan, which was first submitted at the Paris III donor conference, was shelved again due to sharp political differences and the refusal by Speaker Nabih Berri to convene Parliament to discuss and approve hundreds of bills.

Siniora said Lebanon signed an agreement with Egypt last year to buy natural gas to run some of the power plants.

"If everything goes according to plan, we should start receiving Egyptian gas through a pipeline in the middle of 2008," he said.

Earlier, acting Energy and Water Minister Mohammad Safadi said that Syria would not block shipments of gas that would pass through its territory.

Lebanon also agreed to buy electricity from Syria last week. No details of this agreement was not disclosed.

Siniora pinned hopes on finding oil and natural gas in Lebanon in the future.

The prime minister added that all the findings so far had been very encouraging.

"Until we find oil and gas in commercial quantities, the Lebanese should be more conservative in the use of electricity," Siniora said.

Beirut 06-02-2008
The Daily Star

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