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Electricity bills to be calculated at the Sayrafa rate: EDL

According to BDL, the measure will be applied in February, as soon as the first electricity bills reflecting the new electricity rate are issued.

Electricity bills to be calculated at the Sayrafa rate: EDL

The Electricité du Liban billing center in Zouk Mosbeh. (Credit: João Sousa/L'Orient-Le Jour)

In a letter dated Dec. 8, Banque du Liban informed the state-owned electricity provider Électricité du Liban that it will provide “fresh” dollars in exchange for Lebanese lira at its Sayrafa platform rate, which is lower than the market rate, but with a 20 percent markup.

The measure will be implemented in February, as soon as the first electricity bills reflecting the new electricity tariffs, published in October, are issued.

It also means that the lira amounts of the new bills, calculated on the basis of the new dollar rates, will be converted at the Sayrafa rate plus 20 percent, the BDL press office said in the letter.

Initially, EDL wanted to apply the Sayrafa rate at the beginning of each month, the letter stated.

But the approach proposed by BDL was aimed at enabling EDL to finance its fuel purchases, which it cannot currently do due to the lack of means to legally access fresh dollars because of the constraints it faces as a public institution.

Read more:

New budget abandons official exchange rate

The power supplier can currently only rely on fuel deliveries obtained through a barter agreement with Iraq and, as a result, produces only a handful of hours of electricity per day.

EDL confirmed to L’Orient-Le Jour that the 30,000-ton shipment of Iraqi fuel received on Nov. 20 “will be sufficient until January.”

Finally, BDL does not seem to have planned a solution to allow EDL to exchange into dollars more than LL800 billion that the supplier has recovered by collecting invoices calculated according to the old tariffs and the old official peg of LL1,507.5 per dollar.

EDL also suffered the brunt of the banking restrictions illegally put in place since the onset of the crisis in the second half of 2019.

The authorities did not regulate these measures, which led to the blocking of tens of billions of dollars of deposits in Lebanese banks and the halting of dollar-lira conversions at the official peg.

New fee schedule

In the context of an acute crisis that has been ongoing for more than three years, Lebanon has officially abandoned the old official peg through the 2022 budget, the first since 2020 and nine months overdue, which was finally approved and entered into force on Nov. 15.

At the same time, the authorities approved a new electricity tariff schedule. The old one had been fixed since 1994 on the basis of a barrel of oil at $23.

The new rates, presented under the umbrella of a contingency plan to avoid a complete blackout, began to be applied from Nov. 1, but the related bills will not be collected until late February or early March, as EDL is still finalizing collection in all regions.

Coincidentally, it is also in February that the BDL plans to increase the rate of withdrawal of “bank” dollars or “lollars” (deposits in dollars that are blocked in banks) to LL15,000 pounds, the rate applicable to Circulars No. 151 and No. 158, which set out these restrictions.

As EDL confirmed to L’Orient-Le Jour in October, the new tariffs will range from $0.10 per dollar for those consuming less than 100-kilowatt hours (kWh) per month to $0.27 per kWh for those consuming more. The additional charge per ampere (A) is set at $0.21.

Subscription fees have all been increased: those previously set at LL5,000 will now be charged at $4.3, while those at LL10,000 will be charged at $8.6.

EDL has also warned that it was not the only entity responsible for applying the new tariffs and the increase in production that it should allow to finance. It added that many entities are involved in its implementation, such as the BDL, several ministries, municipalities and other public institutions.

This article was originally published in French in L'Orient-Le Jour. Translation by Sahar Ghoussoub. 

In a letter dated Dec. 8, Banque du Liban informed the state-owned electricity provider Électricité du Liban that it will provide “fresh” dollars in exchange for Lebanese lira at its Sayrafa platform rate, which is lower than the market rate, but with a 20 percent markup.The measure will be implemented in February, as soon as the first electricity bills reflecting the new electricity...