Turkish firm shuts down power supply for crisis-hit Lebanon
Beirut – A Turkish company that provides electricity to Lebanon from two power barges shut down its operations on Friday over delayed payments and the threat of legal action against its vessels. The move is expected to increase outages in the crisis-hit Mediterranean country.
The company Karpowership has been threatening to shut down its power supply to Lebanon for weeks and said it took the decision on Friday because of 18 months of overdue payments in excess of $100 million. However, the decision comes after a Lebanese prosecutor last week threatened to seize the ships, pending an investigation into corruption and graft allegations. The company has called those accusations baseless.
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The company provides around 370 megawatts – about a quarter of Lebanon’s supply - through two electricity barges that have been anchored off the Lebanese coast since 2013. The company’s contract expires in September.
“For 18 months, we have been exceedingly flexible with the (Lebanese) state, continually supplying power without payment or a payment plan, because the country was already facing very hard times,” the Karpowership statement said.
“However, no company can operate in an environment with such direct and undue risk,” it added.
The decision is expected to decrease electricity supply by about four to six hours a day in a country that already suffers prolonged electricity cuts. It comes at a time the Central Bank and government are considering ending fuel subsidies, a move that would lead to a sharp increase in the price of gasoline and diesel, making even generator subscriptions unaffordable to most Lebanese.
Blackouts have been a fixture of life in this Mediterranean country since the 1975-1990 civil war, with Lebanon relying mostly on imported diesel for the powerful generators cartel that lights up people’s houses in the absence of government electricity.
Beirut residents have set their routines around three-hour cuts that determine when they can turn on their air conditioning in the summer and water heaters in the winter. Outside the capital of Beirut, the outages can last up to 12 hours or more.
Successive governments have failed to agree on a permanent solution for the chronic electricity failures, largely because of profiteering, endemic corruption and lack of political will.
Karpowership suggested it would still consider resuming electricity supplies through the summer if certain conditions were met.
“Karpowership is well prepared to address the actions against its assets and allegations in international arbitration. It is seeking legal due process and contractual obligations to be met,” according to the company’s management.
“Karpowership also hopes constructive and reasonable discussions regarding a payment plan can commence with the Lebanese state,” it added.
Lebanon has been shaken by an unprecedented economic and financial crisis that has seen the collapse of the local currency, which lost around 85% of its value, and a severe shortage of dollars – dramatically impacting the country’s ability to import basic goods.
Fuel imports are subsidized, but lack of foreign currency is making it harder to secure resources.