Power outages weigh on Libya’s traders

Small businesses face constant disruption due to 1,000MW power shortage

Lengthy power outages have left tradesmen and small businesses in Libya struggling to survive in an economy already crippled by a liquidity crisis and high inflation.

For several years, power cuts lasting most of the day have become common across the North African country during the hot summer months, when air conditioning drives up electricity demand.

Bill payment for heavily subsidised electricity is rarely enforced, so there is little incentive to limit consumption.

Security issues

Plans to boost capacity at power stations have stalled due to security problems and political turmoil, meaning a shortfall of at least 1,000MW at times of high demand.

That leaves small businesses facing constant disruption.

In Libya’s second city, Benghazi, cafe owner Ibrahim Elumami says power cuts nearly halve the rate at which he sells coffee, and have also forced him to stop offering fresh juice. ■

“Frankly, the power cuts in Benghazi have become unbearable. There are long cuts and short cuts and in both cases we take losses,” he said. “I have a generator but it’s not good, it works for four hours, then can’t keep going because of the coffee machines.”

At metal workshops in the city, owners say they reopen at night when power returns, or work by hand. Power surges that occur when the electricity is switched back on can break their machines, and industrial generators cost around 60,000 Libyan dinars ($9,000 or Dh33,052 at black market rates). Generator repair work is one of Libya’s few flourishing trades.

The oil-dependent economy has been crippled by the conflict that developed after a 2011 uprising, as well as by the competition between rival factions and governments.

Power supply is overseen by separate administrations in the east and west.

The east was receiving about 60MW from neighbouring Egypt last week, a power official said, but still faced a supply shortfall of up to 250MW.

In the capital Tripoli, in the more populous west, power outages have been lasting 7-10 hours a day, but sometimes stretch to more than 12 hours.

BlackRock Inc.’s head of iShares EMEA strategy