The Zahrani power plant (South Lebanon) is one of two managed by Primesouth Lebanon. (Photo archive: Mahmoud Zayyat/AFP)
BEIRUT — Primesouth Lebanon, which operates the Deir Ammar and Zahrani power plants on behalf of Électricité du Liban (EDL), began shutting down the two plants at 5 p.m. Wednesday over unpaid dues, though negotiations were underway Wednesday evening to restart service.
The Energy Ministry was in negotiations Wednesday with Primesouth Lebanon, the Minsitry of Finance and Banque du Liban (BDL) to reopen the two vital power plants, an Energy Ministry spokesperson told L'Orient-Le Jour. They added that the dispute was expected to find a resolution by Wednesday night.
Payment default
Earlier on Wednesday, Primesouth Lebanon threatened to shut down the plants by 5 p.m., according to EDL's press office. Primesouth Lebanon management officials contacted by L'Orient-Le Jour declined to comment.
The company's contract the manage the plants, recently extended, is due to expire in July 2024.
Primesouth Lebanon shut down the plants over accumulated payment debts owed by EDL — and therefore by the Lebanese state — to the tune of more than $100 million, an EDL source told L'Orient-Le Jour on condition of anonymity.
While EDL's management did not mention the total amount of outstanding payments, it did say that Primesouth Lebanon had sent it an ultimatum as early as last week, accompanied by a request for an advance on the amounts owed in "fresh" dollars.
Management said it has approached BDL to try to obtain the money and release $10 million from the blocked funds in Lebanese lira generated by the collection of electricity bills. Still, according to EDL, these funds total LL2.5 trillion, or $37 million converted at a rate that was approved by Cabinet on May 26.
Already fragile finances
The Deir Ammar and Zahrani plants are the largest in the country, with a combined capacity of 900 megawatts — more than half the total power available. The two sites are also practically the only ones to have been in operation for the last several months.
EDL, whose already fragile finances have been drained since the start of the crisis that erupted in 2019, is unable to buy fuel to power all its plants. Instead, it has been relying for the past two years on Iraqi fuel supplies via a barter agreement, as well as on recent rare advances it has received from the Treasury.
Primesouth Lebanon previously ceased operations at Deir Ammar and Zahrani in July 2022 over unpaid dues, but restarted hours later after negotiations.
Lebanon's financial crisis, which has seen the lira depreciate by more than 98 percent, has wiped out the already paltry revenue EDL collected via monthly power bills.
Primesouth Lebanon is the sister company of US-based Primesouth, which specializes in energy infrastructure management. It won the tender to manage and maintain the Deir Ammar and Zahrani plants in 2016.
