BEIRUT: The US has launched a $20 million fund to help Lebanese businesses install solar energy systems as owners struggle to stay afloat amid the collapse of the country’s electricity sector.
US Ambassador to Lebanon Dorothy Shea launched the Solar & Renewable Energy Fund on Friday, saying it will help local businesses reduce operating costs, sustain their operations and maintain employment levels.
“This fund will support the purchase and installation of solar power generation systems for at least 25 businesses,” she said.
Lebanon’s crumbling power sector has forced businesses and households to rely largely on private diesel generators.
Power now is available for only four hours a day, thanks to a $60 million advance approved by the Cabinet in favor of the Electricite du Liban to supply fuel to operate the Deir Ammar and Zahrani plants.
However, few trust the state’s sudden generosity. Jamal, a lawyer, said: “Increasing feeding hours to four hours may be a temporary trap to impose the new price on taxpayers, after which we will fall back into darkness.”
Shea said: “Lebanese businesses are struggling in this current economic crisis. They have limited access to financing and their capital accounts, like those of all depositors, are trapped in Lebanese banks. For years, Lebanese enterprises relied on unsustainable and costly energy sources harmful to the environment.
“The US Agency for International Development contributed $4 million in seed capital to the Solar & Renewable Energy Fund, and we are working to secure an additional $16 million from private investors and other donors.”
She added: “The fund will lend capital to enterprises at commercial rates, anticipating that the loans will be repaid within two to three years. This will come from savings on reduced reliance on diesel generators.
“We expect that these businesses will cut their operating costs by at least 20 percent, reducing their expenditures on electricity, and thereby boosting productivity and protecting Lebanese jobs.”
Lebanon has failed for decades to reform the electricity sector, which has cost the state billions of dollars without reaching effective solutions.
The state treasury covers EDL’s losses, which amount to about $2.5 billion annually. The deficit created by the Lebanese electricity sector is about 45 percent of the country’s total.
Protesters staged sit-ins at the EDL headquarters in 2019 over the reduced power supply. Before the crisis, the Lebanese received 12 hours of state electricity per day. However, the feeding hours gradually dropped to eight, then four, before power plants were temporarily shut down.
Farid Belhaj, World Bank vice president for the Middle East and North Africa, met Najib Mikati, Lebanon’s caretaker premier, earlier this week and expressed the bank’s dismay at the government’s failure to reform the electricity sector, a condition for implementing a plan to draw energy from Jordan via Syria, funded by the bank.
A decision by Lebanon’s energy ministry to raise subscription fees for access to electricity, based on the constantly changing exchange rate, has added to the burden facing many Lebanese.
With monthly bills amounting to millions of Lebanese pounds, many are cancelling their subscription, saying they can no longer afford to pay state electricity and private generator fees, especially since the latter are priced in dollars.
As the value of the Lebanese pound continues to fall and the price of diesel to operate private generators rises, many have opted for solar energy.
Thousands of solar panels have been installed on residential buildings and on rural land in the countryside to power factories producing local commodities.
Lebanese citizen Ahmed Al-Rabih said: “I decided to cancel my electricity subscription because I cannot bear all these burdens. The consumption value is 10 cents for under 100 kilowatts, and 27 cents for over 100 kilowatts, which means that the bill will at least amount to 1,500,000 Lebanese pounds.”
An EDL employee told Arab News: “Many citizens who emigrated from Lebanon have asked their relatives to submit requests to cancel their electricity subscription because they would be pointlessly paying fees without benefiting from electricity. Others are canceling their subscription because they have private generators or solar energy for their buildings and there is no need for them to pay additional fees.”
The employee said noted that a third category of people are canceling their subscriptions without having other alternatives, but they can simply no longer afford it.
Activists launched an online campaign under the slogan “We will not pay” in objection to the new tariff for state electricity and to boycott the payment of EDL bills.