Libya working on new regulations for power sector privatisation

21 April 2013

Libya’s Electricity Ministry discussing independent power programme

Libya is in discussions over the establishment of a regulator for the power sector and opening up an independent power plant (IPP) programme, according to Deputy Prime Minister Awad Ibrahim Elbarasi, speaking at a MEED Libya projects press conference in Dubai on 18 April.

“We need new regulations. The Ministry of Electricity is working on a regulator, and whether we can open up Libya to IPPs. Libya has lots of cash, but why should everything be done by the government? The laws need to be changed,” he said.

Elbarasi’s responsibilities as deputy prime minister include the power and housing sectors. Electricity Minister Ali Mohammed said Libya plans to establish a electricity regulatory authority by the end of the year.

“This summer, we are expecting shortages,” said Muhairiq. “Last year, demand grew by around 4 per cent to 5,900MW. Next year we expect to see 6,600MW, another 5-6 per cent growth driven by the private sector.”

The government is attempting to fast-track projects in the power sector that would otherwise be bogged down in bureaucracy and auditing. “We are restructuring the process, so audits occur after the start of a project and not before. Otherwise we will have delays of six months before we even begin,” said Elbarasi.

The change is a lesson learnt from Elbarasi’s experience at Dubai Electricity and Water Authority (Dewa), where he spent a decade before returning to Libya in 2011.

“The executive branch there is like a chief operating officer’s office. This is something missing from most Arab countries, where everything goes through audits and multiple ministries before it is signed off,” he said.

Since financing would not be a major barrier, the main driver behind opening up the sector to international companies would be to facilitate the transfer of technical expertise to Libya.

While Muhairaq has talked of renewable energy providing a fifth of Libya’s power by the end of the decade, Elbarasi has been more sceptical.

“Renewables have a bright future, but I have reservations about large projects which will generate 1,000MW,” said Elbarasi. “It is better to start with small projects. Renewables can be a reserve, but not to meet a shortage in supplies.”

Libya currently has one project under way for a 60MW wind farm project in the east of the country, which is expected to be completed by the end of 2014. There are an additional two contracts to be tendered for solar power generation in the south of the country, totalling 45MW.

It is also in talks with German consortium Desertec, which plans European imports of solar and wind power from North Africa.

“The technology is changing and the prices for solar cells are falling. The problem is efficiency,” said Elbarasi. “In Libya, peak demand occurs between 7pm and 11pm, when solar cell efficiency is low.”

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications