Pending political approval, investment in renewables awaits

Pending political approval, investment in renewables awaits

Lebanon could license the construction of nearly 380 megawatts ( MW) of renewable energy plants as early as this summer, a Ministry of Energy and Water (MoEW) official tells EXECUTIVE. This would mean a rise in generation capacity of just over 20 percent — a far cry from satisfying the country’s demand for power. This clean electricity, generated through new windmill installations and solar farms, would, however, help Lebanon reach its 2020 target of 12 percent renewable energy in the national power mix. Companies would need to raise capital to finance construction of the projects, a not- so- difficult prospect thanks to a 2010 central bank incentive and spurred on by last year’s Paris Agreement on climate change.

WIND’S PICKING UP

It is in a blustery part of north Lebanon that the government envisions construction of three windfarms. Near Akkar, in the country’s wind corridor, rotating turbines would generate some 200 MW of clean electricity if the government finally licenses their construction.

The MoEW began the tendering process back in 2013, shortlist-

ing three bids. Four years on, “We’ve hopefully come to the last steps,” says Pierre el-Khoury, head of the Lebanese Center for Energy Conservation (LCEC), the technical body at the MoEW responsible for renewables.

Electricity Law 462, ratified in 2002, stipulated that a regulator would license new power plants, but the government never got around to appointing that body. Instead, Parliament passed legislation in 2014 and 2015 to get around the legislation by allowing cabinet, on the recommendations of the MoEW and the Ministry of Finance, to decide when the private sector could build power plants. Now, Khoury tells Executive, the windmills are waiting for approval from the Minister of Fi- nance so that both ministries can ask cabinet for the permits.

In addition to the 200 MW of wind energy, the MoEW also wants to license up to 180 MW of solar. At the beginning of 2017, the ministry asked for expressions of interest (EOI) for the construction of 12 solar farms, consisting of three projects each in the districts of South Lebanon, Mount Lebanon, Bekaa Valley, and North Lebanon. The EOI call resulted in 265 project proposals submitted by 173 companies, Khoury says. “Based on this high rate of replies, the MoEW finalized the tender documents and sent a request asking [companies] to submit detailed offers.” Khoury says the deadline to submit bids is midAugust, adding that the ministry needs to move quickly. “It will take us some time to review these offers. But

Investing in largescale renewables is a realistic opportunity

we need to finalize the whole process before April 2018,” as that is when Cabinet’s mandate to license new private sector power plants expires.

A NEW DAWN APPROACHES

If the Council of Ministers does end up licensing the windmills this summer, and the solar projects before April 2018, then companies will need to finance the cost of construction.

That does not seem like much of an obstacle. In 2010, Banque du Liban (BDL), Lebanon’s central bank, moved to spur investment in renewables by creating a funding mechanism known as the National Energy Efficiency and Renewable Energy Action