Qatar to Fund and Operate Major Electricity Project in Lebanon, Boosting Ailing Energy Sector

Qatar has pledged to finance and operate a significant electricity project aimed at supporting and modernizing Lebanon's struggling energy sector, announced Lebanese Prime Minister Nawaf Salam on Friday. This commitment was revealed during a visit to Beirut by Qatar's Prime Minister Sheikh Mohammed bin Abdulrahman, who also serves as the Foreign Minister of the gas-rich Gulf state. The dire state of electricity provision in Lebanon was a central topic during discussions between the senior officials.

Prime Minister Salam stated, "Qatar will finance, implement and operate the electricity project, without the Lebanese Treasury bearing any prior investment cost." He made these remarks alongside Sheikh Mohammed.

Sheikh Mohammed further disclosed that QatarEnergy has entered into an agreement with the French company TotalEnergies to jointly develop a solar power plant in Lebanon as an initial venture. The overarching goal is to establish a substantial investment project "that would benefit the Lebanese economy, as well as the Qatari companies and entities participating in it," he explained.

While Lebanon has seen an increase in solar panel adoption recently, the initial expenses have remained a barrier for many households. Prime Minister Salam indicated that the new project intends to offer a more dependable and cost-effective electricity supply, contributing to the "rehabilitation, development and modernization of the electricity production infrastructure" within Lebanon.

Lebanon is currently navigating a challenging financial landscape, with its economy projected to shrink by 6 to 7 percent this year, making the government heavily dependent on external aid. A recent report highlighted that private diesel generators were supplying approximately half of Lebanon's electricity at the start of the year, a figure likely to have increased, albeit at a significant cost to consumers.

An Lebanese official commented to The National, "There's a serious will to arrange a solution for the electricity [situation] in Lebanon," with another indicating that Qatar and Lebanon are in the "final stages" of finalizing their agreement.

Following meetings with President Joseph Aoun and Foreign Minister Youssef Raggi at the presidential palace in Baabda, Sheikh Mohammed affirmed, "Qatar will remain supportive of Lebanon and will seek to provide comprehensive solutions to the energy issue in the country." He emphasized that "the energy sector is at the heart of interests" and that "Qatar seeks to provide integrated solutions in this field." Sheikh Mohammed also held discussions with Parliament Speaker Nabih Berri and army commander General Rodolphe Haykal.

Lebanon's reliance on costly diesel imports for private generators has exacerbated already high energy bills, particularly with rising global oil prices influenced by the Iran war. This situation has placed additional strain on households and businesses still recovering from the 2019 economic crisis. The state utility, Electricite du Liban, can only provide a few hours of power daily.

The severity of the energy crisis has led Energy Minister Joe Saddi, who also met with Sheikh Mohammed, to boycott cabinet sessions in protest of perceived governmental inaction. Lebanon's energy sector has long suffered from underinvestment, a problem successive governments have failed to resolve. Historically, Gulf nations were significant aid providers to Lebanon, but this support diminished in recent years due to concerns over the growing influence of Iran-backed Hezbollah. Qatar, in particular, was instrumental in Lebanon's reconstruction after the 2006 Israel-Hezbollah war, though such funding has been less forthcoming following recent escalations of the conflict.