Lebanon's caretaker Minister of Energy Walid Fayad (center) at a meeting with the heads of the Water Boards of the various regions, Oct. 9, 2024. Photo courtesy of the Ministry's press office.
In an interview with CNBC Arabia on Tuesday, Oct. 29, Lebanon's caretaker Energy Minister, Walid Fayad, estimated the cost of “Israeli aggression” on Lebanon’s electricity and water sectors at nearly half a billion dollars, including losses from damage and additional incurred expenses. He noted that this is a “preliminary estimate.”
The fighting between Hezbollah and Israel has escalated into near-total war since summer, with relentless Israeli bombardments across multiple regions of Lebanon. Over 2,800 people have been killed, most since late September, and around 1.2 million have fled the bombings, either to other parts of Lebanon or abroad.
According to Fayad, the bill already stands at $320 million for the electricity sector alone and $160 million for the water sector, totaling $480 million based on ministry estimates. Notably, Lebanon’s main power plants operated by Electricité du Liban (EDL) have so far been spared from direct strikes.
The losses in electricity partly stem from costs associated with population displacement. Fayad stated that providing “power, heating and fuel” in shelters for the displaced has so far cost $33 million. An additional $60 million has been spent to bolster electrical infrastructure in regions hosting displaced people to support the network’s stability.
Bombing-affected areas
Another portion of the losses relates to damages and destruction inflicted on power distribution networks in the hardest-hit areas, including Sour, the Bekaa Valley, southern Beirut suburbs, and southern Beirut itself, totaling an estimated $100 million. Fayad also cited a $130 million shortfall in bill collection, which EDL, chronically underfunded for years, traditionally recovers with significant delays.
Fayad provided fewer details on the water sector's war-related losses, saying they include both damage costs and those incurred from displacement.
In his interview, Fayad assured that his ministry is working in “constant coordination” with EDL to maintain power production and distribution for both relocated residents and those remaining in heavily impacted areas, as well as to sustain vital infrastructure like ports and airports. Coordination continues with the Red Cross and the Lebanese army to maintain and repair networks in risky zones, specifically mentioning “Hasbaya,” “areas around Sour,” and “Nabatieh,” three districts heavily exposed to Israeli bombings.
Maritime border
Asked about the barter agreement between Lebanon and Iraq, currently Lebanon’s main fuel source for EDL and set to expire at the end of the year, Fayad stated that discussions are underway to “renew the agreement for another year” and possibly increase the fuel supply to “2 million tons.” He thanked Iraq for its “support” of Lebanon, both through this agreement and on other fronts related to the war. Since late September, Lebanese citizens have been allowed to enter Iraq using only their ID cards.
The initial deal, struck in July 2021 and implemented that September, provided Lebanon with one million tons of fuel over 12 months to meet part of its public electricity needs, severely impacted by the economic crisis that erupted in 2019. In May 2023, the Iraqi Cabinet announced an increase in Lebanon’s fuel allotment from one million to 1.5 million tons, renewing the contract for a third year. The agreement has faced implementation issues, notably delays in Lebanese payments this year.
Regarding Israeli Energy Minister Elie Cohen’s stated intent to reconsider the maritime border agreement brokered by the U.S. in Oct. 2022, Fayad argued the deal “cannot be so easily undone” and urged Lebanon’s international partners to intervene. He concluded by stressing the importance of achieving a cease-fire between Israel and Hezbollah.
