Caretaker Energy Minister Walid Fayad met with Iraqi Oil Minister Ihsan Abdul-Jabbar Ismail and Interim Minister of Electricity, Adel Karim, in Baghdad on Tuesday to discuss the continued supply of Iraqi fuel to Lebanon, a deal which was signed in July 2021 to help the cash-strapped country with worsening nationwide electricity cuts.
An initial convoluted deal between the two countries involved obtaining one million tons of high sulfur fuel oil from Iraq for the duration of one year.
Fuel shipments intended at alleviating electricity shortages began arriving in Lebanon in September 2021 but a widespread improvement in the power supply is yet to be realized.
Électricité du Liban can generate fewer than 500 megawatts from the fuel obtained through the Iraqi deal, EDL had said in a statement in September.
It was estimated the Iraqi fuel’s value stood at $300 million to $400 million, an amount Lebanon cannot afford as it grapples with an unprecedented economic crisis.
To pay for the fuel supplied by Iraq, it was decided that Banque du Liban would open an account for the Iraqi central bank, into which Lebanon will deposit so-called fresh dollars to purchase the fuel. Lebanon would defer making payments on each shipment for up to a year, at which time the funds will be due, along with interest. BDL would be responsible for making the payments, either in cash or via money transfer.