Lebanon seeking companies to build hydroelectric plants

The Ministry of Energy and Water of the Republic of Lebanon is calling for expressions of interest to participate in proposal submissions to build and operate hydroelectric plants in the country.

Private investors and companies are invited to respond to this call, with the government’s objection being to procure hydroelectric energy using a power purchase agreement. Therefore, the private sector entity would finance, develop, acquire land, design, build, own, operate and maintain the hydroelectric plant, delivering electricity to the Electricity of Lebanon (EDL) network/grid. EDL will contract to purchase electricity for 20 years.

The deadline for submitting expressions of interest is June 15.

Background on Lebanese electric situation

Lebanon sources very little of its electricity from generating facilities within the country. In fact, in 2010, 96.8% of the total electricity consumed was imported and only 3.2% came from hydroelectric plants and solar water heaters located in Lebanon. In addition, most of the imported electricity comes from thermal facilities.

In addition, the Lebanese electricity sector is facing such problems as load shedding, technical losses and aging of power plants, forcing end-users to rely on diesel generators to overcome electricity shortages.

The government made a pledge, at the United Nations Framework Convention on Climate Change COP 15 meeting, to develop its renewable energy production capacity to reach 12%. This pledge was adopted as the national strategy for the electricity sector. The Council of Ministers also adopted the National Energy Efficiency Action Plan in November 2011, and the 2011-2015 plan includes 14 initiatives that tackle energy efficiency and renewable energy. Under the National Renewable Energy Action Plan 2016-2020, the national objective would be to implement renewable energy projects that would produce 767 ktoe of electricity in 2020.

All the hydropower plants in Lebanon were constructed before 1970, and total installed hydropower nominal capacity is 280 MW. Electricity produced from the hydro plants constitutes about 4.5% of the total production. The government believes the share of hydro in the electricity mix could be increased by at least 120 MW through maintenance, rehabilitation and/or replacement of existing hydro plants, as well as additional capacity.

A master plan for the hydroelectric sector development identified 32 new sites with potential of 263 MW for a cost of US$667 million and 368 MW with a cost of $772 million. Of these 32 sites, about 25 are economically viable.

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