LEVERAGING THE BANKING CRISIS TO CROWDFUND ELECTRICITY REFORM IN LEBANON

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The lights have gone off in Lebanon. The country is battling one of the most severe financial, economic and
political crises in its recent history. The crisis has been in the making for years but came hitting like a
hurricane like most crises do. Over the last decades, budget deficits and balance of payments sank deeper
into the red lines year-on-year, while successive governments failed to implement basic reforms that would
reverse the trend.
The crisis has had catastrophic repercussions on Lebanese citizens, who feel a deep sense of despair. Food,
educational, health and financial safety are at risk. People have lost access to their savings due to the
banking crisis and access to medicine, electricity, and basic items have become a luxury. According to the
UN3, 74% of the population has fallen below the poverty line and the country is witnessing a wide mass
exodus wave among its skilled young professionals.
While the financial and technical deficiency of the Lebanese electricity sector is not the major cause of the
crisis, it has certainly accelerated its onset. Since 1992, EDL has failed to secure reliable electricity to
consumers and to balance its budget. EDL losses averaged $1.5 billion per year over the last 10 years4.
This has had ripple effects on economic and social welfare. The lack of reliable and affordable electricity
has limited economic growth, and the use of polluting fuels such as Heavy Fuel Oil (HFO) and diesel has
large environmental and health repercussions. The financial deficiency of the sector had a dual impact on
the fiscal and balance of payment balances. The lack of reforms, transparency and governance have led to
a public trust deficit. [pdf-embedder url="https://www.e-lebanon.org/wp-content/uploads/2021/11/20211020_comprehensive_solution_to_the_lebanese_electricity_sector_report_pdf.pdf"]

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