‘We’re heading into darkness’ – generator mafia threatens to cut Lebanon’s power

In Lebanon these days, the only thing keeping the lights on during ever-lengthening nationwide blackouts is a cartel of businessmen known locally as the “generator mafia”.

For years, private generator owners have reaped fat profits by charging a hefty premium to supply a gap in the electricity market. But after Lebanon’s economic collapse, business is no longer booming – and the head of the generator mafia is threatening to plunge the country “into darkness”.

“Be ready in two days: We’re going to hand our generators over to the government and tell them it’s their problem to deal with. We cannot keep going,” Abdo Saade said.

Mr Saade is the head of the private generator owners’ syndicate of Lebanon, a group of several thousand businessmen who are supplying most of the power across the tiny nation.

Lebanon started using private generators to cope with power outages during its 15-year civil war. “We came to fix a small gap in the market,” said Mr Saade (60).

That gap proved lucrative and generator owners have continued operating in a largely unregulated grey market since the conflict ended in 1990. Though the state company Electricite du Liban (EDL) is the sole legal power provider, it has always lacked the capacity to supply 24/7 electricity.

Today private generators are tucked down alleys, in basements and in vacant lots across towns and cities.

Successive governments have failed to fix power shortages. Projects to build new power plants and install a nationwide metering system became mired in mismanagement and corruption. Along the way, the government spent phenomenal sums on subsidising consumption.

As Lebanon entered economic crisis in 2019, the country’s public debt had surpassed nearly 170pc of GDP, one of the highest rates in the world.

An estimated 46pc – or $45bn (€38.7bn) – of this burden is associated with spending on the electricity sector, according to Marc Ayoub, an energy expert at the American University of Beirut.

“The electricity sector is a contributor to the crisis we are in,” he said.

As the crisis has deepened, foreign reserves have shrunk and the government has cut the amount of imported fuel it supplies to EDL. This month the country’s two biggest power stations shut down entirely for several days.

Beirut, once a shimmering city, is these days a glum place, left without street lamps, or even functioning traffic lights much of the time.

Power outages that once lasted two hours can stretch to days, leaving private generator owners supplying more power than the state.

“We’ve exchanged roles,” said Mr Saade.

While generator owners once grew wealthy off monthly profits of up to 30pc, “those days have ended”, he added.

In recent months the government phased out fuel subsidies, meaning diesel now costs 10 times more.

While private generators are technically illegal, the government recognises their role by setting monthly tariffs. Though subscription costs have increased roughly tenfold since the start of the year, Mr Saade said this is not enough.

“If this continues, 80pc of generator owners won’t be able to continue,” he said, calling on an essentially bankrupt government to reintroduce subsidies. “We’re heading into darkness.”

Many Lebanese are unsympathetic to Mr Saade’s position. Over 82pc are now so poor they cannot afford at least one essential service, according to the UN. This means that many have forgone their generator subscription. (© Telegraph Media Group Ltd 2021)