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

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.


SoftBank to invest $40bn for new Indonesia capital

The new capital is to be built on the island of Borneo, where the Kutai National Park is known for its rainforests and its population of orangutans and other primates. (Shutterstock)
Updated 18 January 2020

SoftBank to invest $40bn for new Indonesia capital

  • Son joins Abu Dhabi crown prince and former British PM in steering committee for city

JAKARTA: Japan’s SoftBank is offering to invest $30 billion to $40 billion in the development of a new Indonesian capital, an official said Friday.

The billionaire founder and chief executive of SoftBank, Masayoshi Son, hinted at partnering with the Indonesian government to fund the project when he met President Joko Widodo last week in the capital, Jakarta.
Son and former British Prime Minister Tony Blair have been included in the steering committee to be led by Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed Al Nahyan to oversee the construction of the new capital city on the island of Borneo.
Indonesian Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan told a news briefing that SoftBank was offering $30 billion to $40 billion, though it was not immediately clear what project the Japanese conglomerate would invest in specifically.
“We have not yet decided how they would invest, it could be for education, a research center or hospital development,” Pandjaitan said. He said he will meet Son in Davos and Tokyo later this month to finalize the plan.
After meeting Widodo last week, Son told reporters that he was interested in supporting “a new smart city, the newest technology, a clean city and a lot of artificial intelligence.”
Widodo announced last August that Indonesia’s capital will move from overcrowded, sinking and polluted Jakarta to a site in the sparsely populated East Kalimantan province on Borneo, known for rainforests and orangutans.

BACKGROUND

The capital’s relocation to a 256,000-hectare (632,580-acre) site almost four times the size of Jakarta will cost an estimated 466 trillion rupiah ($34 billion). The government is set to begin the construction later this year.

The capital’s relocation to a 256,000-hectare (632,580-acre) site almost four times the size of Jakarta will cost an estimated 466 trillion rupiah ($34 billion). The government is set to begin the construction later this year.
Investors from Asia, the Middle East, the US and China have shown interest in developing the city, Pandjaitan said.
Jakarta, with 30 million people including those in the greater metropolitan area, is prone to earthquakes and flooding, and is rapidly sinking due to the uncontrolled extraction of ground water.
Monsoon rains and rising rivers early this month left more than 60 people dead and 500,000 displaced.
Mineral-rich East Kalimantan was once almost completely covered by rainforests before illegal logging removed much of its original growth. It is home to only 3.5 million people and is surrounded by Kutai National Park, known for orangutans and other primates and mammals.
Indonesia is an archipelago nation of more than 17,000 islands, but currently 54 percent of the country’s nearly 270 million people live on Java, the country’s most densely populated island where Jakarta is located.