Lebanese & Iraqi Ministers Convened In Baghdad To Discuss Fuel Deal And Looming Payments

source: The Cradle

This Tuesday, Lebanon’s Caretaker Energy Minister, Walid Fayad, met with Iraqi Oil Minister, Ihsan Abdul-Jabbar Ismail, and Interim Minister of Electricity, Adel Karim, in Baghdad.

The meeting was centered on discussing the prospects of continued supplies of Iraqi fuel to Lebanon. The agreement was signed in July 2021, with the aim of providing a lifeline to the cash-strapped nation amidst worsening electricity and fuel shortages. 

The arrangement between the two nations’ energy and fuel ministries entailed acquiring one million tons of high sulfur fuel oil from Iraq for a period of one year. 

Despite the arrival of Iraqi fuel shipments, a widespread improvement in the power supply is yet to be seen.

In a statement last September, Électricité du Liban (EDL) acknowledged the agreements’ insufficiency and claimed that fewer than 500 megawatts could be generated. 

Estimates indicate that the value of fuel supplied by Iraq to Lebanon is between $300 million to $400 million, an amount which the Lebanese state can hardly float. 

However, the agreed-upon pay scheme included a one-year payment deferral. Twelve months later, Lebanon’s Central Bank (BDL) is expected to begin making payments, with interest, either in cash or via money transfer.