Lebanon plans PPP schemes

22 March 2011

Power, transport, tourism and telecoms to  be opened up to private sector

Lebanon is planning a raft of public-private partnerships (PPPs), including the development of new power plants and transport infrastructure, and the privatisation in the telecommunications sector.

The secretary-general of Lebanon’s Higher Council for Privatisation (HCP), Zaid Hayek, says the top priorities for PPP schemes will be the development of independent power projects (IPPs) and other utilities projects.

Lebanon requires a minimum of 1,500MW of new capacity, although that could go up 2,500MW. It also plans to develop a network of 27 dams in the country, of which five can be financed through a PPP structure, according to Hayek.

Lebanon projects market
SectorValue of projectsPercentage
Construction & infrastructure20,22683
Oil & gas2,50010
Power & water1,7307
Source: MEED Projects

“Other sectors have also shown an interest in PPP, including tourism, but the priorities for us are power, water and public transport,” says Hayek.

Other potential PPP schemes include initiatives in public transport including light rail, bringing some of the railroads back into operation and building underground parking space to reduce traffic and parking on the streets, particularly in Beirut.

Lebanon has suffered from a lack of investment in its critical infrastructure over the past 15 years. The country has relied mainly on foreign government grants and loans to fund infrastructure projects, while Beirut’s budget is taken up by salaries, servicing national debt and subsidising the power sector.

Plans to open up the infrastructure sector to private sector investment have frequently been derailed by Lebanon’s fractious politics. The prime minister designate, Najib Mikati, is currently struggling to form a government.

“We’re in a transition phase now, it is not yet clear what the policy of the future government will be for privatisation, but the prospects are still very good,” says Hayek.

The HCP is currently waiting for 69 laws, which were passed two governments ago to go through parliament. Among them includes a revised version of the PPP law, which Hayek describes as “crucial for Lebanon in order to reform all of these sectors”. The law would contribute towards ensuring transparency in dealings with the private sector. “Major investors are not interested in spending millions preparing for a bid only for a minister to award the contract to their own favoured bidder,” Hayek says.

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