Lebanon approves plan to reform ailing electricity sector

The Turkish floating power station Karadeniz Powership Orhan Bey, which generates electricity to help ease the strain on the country's woefully under maintained power sector, is docked near the Jiyeh power plant, south of Beirut, Lebanon, Monday, April 8, 2019. (AP)
Updated 08 April 2019
0

Lebanon approves plan to reform ailing electricity sector

  • The decision is the most significant by the cabinet since it was formed in late January
  • Hariri on Monday said the cabinet unanimously approved the plan which would improve power supply, raise electricity tariffs

BEIRUT: The Lebanese government on Monday approved a plan to reform its electricity sector, vowing to provide power 24 hours a day from a grid notorious for blackouts.
The decision is the most significant by the cabinet since it was formed in late January and is a step toward unlocking billions in aid pledged to Lebanon in exchange for slashing public spending and overhauling the electricity sector.
Prime Minister Saad Hariri on Monday said the cabinet unanimously approved the plan which would improve power supply, raise electricity tariffs and reduce fiscal deficit resulting from government transfers to state-run Electricite du Liban (EDL).
“This plan satisfies the Lebanese people because it will bring them electricity 24/7,” he told reporters after the session.
“It will also reduce the budget deficit,” he said.
Hariri said implementation of the plan was “urgent” and “could not be delayed” because it was critical to Lebanon’s economy.
Energy Minister Nada Boustani, who first presented the plan last month, described the cabinet’s approval as a “positive step.”
The plan still needs to be approved by parliament.
A dated electricity grid, rampant corruption and lack of reform has left power supply lagging way behind rising demand since Lebanon’s 1975-1990 civil war.
According to the McKinsey & Company consulting firm, the quality of Lebanon’s electricity supply in 2017-2018 was the fourth worst in the world after Haiti, Nigeria and Yemen.
Government subsidies to state-run EDL have also worsened the cash-strapped government’s budget.
EDL receives one of the largest slices of the government’s budget after debt servicing and salaries.
According to the World Bank, government transfers to EDL averaged 3.8 percent of gross domestic product from 2008 to 2017, amounting to about half of Lebanon’s fiscal deficit.
Lebanon is one of the world’s most indebted countries, with public debt estimated at 141 percent of GDP in 2018, according to credit ratings agency Moody’s.
A conference dubbed CEDRE in the French capital in April pledged aid worth $11 billion (9.5 billion euros), promising to stave off an economic crisis.
At the Paris conference, Lebanon committed to reforms including slashing public spending and overhauling the electricity sector.
In exchange, the international community has pledged major aid and loans, mostly for infrastructure projects that need to be signed off by the new government.


Amazon strengthens ties with French food retailer Casino

Updated 4 min 20 sec ago
0

Amazon strengthens ties with French food retailer Casino

  • The move could re-ignite speculation of a bigger deal later on
  • The extended partnership comes as Casino is selling assets and cutting debt to try to allay investor concerns

PARIS: E-commerce giant Amazon and French retailer Casino are expanding their partnership, with Amazon installing pick-up lockers in Casino stores and more of the French company’s products to be available on Amazon.
The move, which follows an initial co-operation between Casino’s upmarket Monoprix supermarket chain and Amazon in Paris, could re-ignite speculation of a bigger deal later on.
An Amazon spokeswoman said it had a policy of not commenting on market speculation. Amazon’s purchase of bricks-and-mortar US food retailer Whole Foods Market last year has raised speculation it could seek to buy a European food retailer.
The extended partnership comes as Casino is selling assets and cutting debt to try to allay investor concerns over its finances and those of parent company Rallye.
The deal, unveiled on Tuesday, will see Amazon lockers installed in 1,000 locations across France in nine of Casino’s brands, including Monoprix, Monop, Geant, Hyper Casino, Casino Supermarche, Leaderprice, Viva and Spar by the end of the year. The lockers store Amazon products to be picked up by customers.
More Casino-branded products will also be available on Amazon, while Amazon and Monoprix will extend their partnership on Amazon’s Prime Now grocery delivery service outside Paris and into new cities in the next twelve months.
“This announcement represents a new step in strengthening Casino’s omnichannel strategy to always be a little more in the heart of consumers’ lives,” said Casino’s chief executive Jean-Charles Naouri in a statement.
Monoprix, seen by analysts as similar to Whole Foods, started filling orders for subscribers to Amazon’s Prime loyalty program in parts of Paris last September.
This partnership has been closely watched as Monoprix was the first French retailer to agree in March 2018 to sell products via Amazon, causing a stir in the fiercely competitive domestic market.
France is Amazon’s third largest market in Europe, after Britain and Germany. Amazon is the e-commerce leader in France with a market share of 17.3 percent, but its grocery market share stands at just 2 percent, according to Kantar data.
The US group, which has run its Amazon Prime express delivery service in Paris since 2016, has made no secret of its desire to launch a grocery delivery service in France as part of its ambitions to expand in food retail.
But the French supermarket sector has powerful incumbents such as Carrefour and Leclerc, operating at low margins and with a dense network of stores.
Earlier this week, Casino said it would sell 12 Casino hypermarkets and 20 supermarkets to Apollo Global Management in a deal worth up to €470 million ($529 million).