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Lebanese President allots $197 million treasury loan to avoid blackout in Lebanon

Lebanese President Michel Aoun has approved an exceptional loan of up to approximately $197 million for the state electricity company.

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According to an official statement, Lebanese President Michel Aoun has approved an exceptional loan of approximately $197 million for the state electricity company to import fuel before supplies run out. His approval came days before the country was due to experience a total power blackout.

On Monday morning, the hours of electricity rationing in various regions reached their lowest levels, with some areas receiving only half an hour of power per day, and there were more protests from people after generator owners raised their service tariffs to the point where bills exceeded LBP700,000 per month.

On May 28, the caretaker government’s finance minister, Ghazi Wazni, requested that the Banque du Liban (BDL) open four credits totaling $62 million to provide fuel to energy-producing plants, but the BDL asked for government approval. On Monday afternoon, Aoun agreed to give the credits “special authorization” so that Electricite du Liban (EDL) could buy fuel through the treasury advance.

“The rationalization of subsidies will not currently include fuel or diesel used by generators,” a Finance Ministry source told Arab News. “It is currently limited to gasoline, along with medicines for incurable diseases and wheat, in order to ensure the continuation of pumping life into the arteries of the state,” the source stated.

The source also said that the BDL governor, Riad Salameh, had “reduced the reserves from $15 billion to $14 billion in order to be able to spend.”

Telecommunications Minister Talal Hawat tried to reassure people that Lebanon would not return to the “carrier pigeon” and the telecoms sector would not be cut off as long as the BDL secured the necessary funds to purchase fuel.

“Of course, if there isn’t enough fuel, the internet will go down, but we aren’t there yet because the energy minister has provided us with enough to keep all terrestrial and cellular networks running. Due to power interruptions, we now require three times the quantity that we did previously, ranging from 25,000 to 70,000 tons every day”.

“The network’s electricity generators for emergencies can cover about eight hours, but they are currently working between 20 and 21 hours a day, and there are malfunctions that must be fixed. The budget for operating and maintaining the ground network allocated LBP48 billion from the budget approved by the previous government, and this number is tiny with the high exchange rate of the dollar.

“We are working on adding an amount of LBP30 billion so that we can pay the obligations until the end of the year and complete the maintenance work. Otherwise, services will be reduced.”

Since August 2019, Lebanon has been dealing with a socio-economic as well as a political crisis that has ravaged the country into turmoil. The Lebanese currency has also suffered, creating the biggest financial crisis in the country’s history, aggravated by the COVID-19 pandemic and the Beirut Port explosion.

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