Lebanon's finance ministry will not issue letters of credit (L/Cs) to Electricity du Liban (EDL) without the approval of the government.

The loss-making state electricity utility cannot obtain credit on its own strength, and relies on government-backed L/Cs to obtain fuel for its power generators.

Government responsibility

While finance minister Ali Hassan Khalil said that his ministry would not put up the L/Cs, he said he had filed a written request with the government, asking it to approve the release of funds by the ministry to allow EDL to buy fuel oil.

The cost of fuel oil accounts for more than 85 per cent of EDL's annual losses, which are paid for with government funds.

Taking the blame

The minister appears keen not to take the blame for EDL running out of fuel and the consequent rationing of power to electricity consumers.

"I will not be held responsible for the consequences of not issuing L/Cs, as the release of such funds under the previous government was not based on a clear procedure," he said.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.