Turkish Energy Firm Shuts Down Power to Heavily Indebted Lebanon

The shutdown threatens longer daily power cuts across Lebanon, which gets about a quarter of its supply from Turkey's Karpowership

Reuters
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Karadeniz Powership Orhan Bey, an electricity-generating ship from Turkey, docked at the port in Beirut, in 2017.
Karadeniz Powership Orhan Bey, an electricity-generating ship from Turkey, docked at the port in Beirut, in 2017.Credit: AZIZ TAHER/ REUTERS
Reuters

Turkey's Karpowership, which provides electricity to Lebanon from two barges, said on Friday it was shutting down supplies over payment arrears and a legal threat to its vessels amid the country's economic crisis.

The company, which supplies 370 megawatts (MW), or about a quarter of Lebanon's supply, had told the government this week it would have to shut down in the absence of moves towards a settlement.

The shutdown threatens longer daily power cuts across the heavily indebted nation, which did not have enough capacity to meet demand even before Karpowership's move on Friday.

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Many people rely on private generators or struggle for several hours a day without power.

"For 18 months we have been exceedingly flexible with the state, continually supplying power without payment or a payment plan, because the country was already facing very hard times. However, no company can operate in an environment with such direct and undue risk," Karpowership, a unit of Karadeniz, said.

A source familiar with the situation said the step was taken at about 8 A.M. (0500 GMT), as the vessels' fuel had been running down.

The source, speaking on condition of anonymity, said arrears exceeded $100 million, and added that the government had not reached out for talks or to try and resolve a legal case, despite the firm's repeated appeals meant to avert a shutdown.

Lebanon's Finance Ministry said it had been notified by the Turkish firm and cited a lawmaker saying that the country could face "total darkness" in case of a shut-off. It has made no public statement about any talks.

A Lebanese prosecutor threatened this month to seize the barges and fine the firm after Lebanese TV channel al-Jadeed reported corruption accusations over the power contract.

The firm denies the charges.

At the weekend, it said it had not been paid for 18 months, a period coinciding with the financial crunch, and added that it sought a "reasonable solution" to maintain generation.

Each of its barges has capacity of 202 MW, against a contract to supply a total of 370 MW.

An industry source said Lebanon's total capacity was about 2,200 MW, including the barges, but was only generating a total of 1,300 MW, including the Turkish supplies of 370 MW. Lebanon's peak demand in 2020 was 3,500 MW, the source said.

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