As Lebanon flickers, Zahle burns bright

Nakad flips through documents papers at his office in Zahle.

ZAHLE, Lebanon: Not everyone has thrown their hands up in despair as Lebanon fumbles in the dark amid the longest-lasting power outages the country has seen in two decades. Electricite du Zahle CEO Asaad Nakad is dwarfed by the piles of documents he is hurriedly flipping through.

A map of his jurisdiction’s power grid towers above him and his desk is flanked by employees, waiting reverently as their vivacious boss goes about his business. It’s 2:00 p.m. on a weekday. On the other side of Mount Lebanon, the government’s state-run electricity office, Electricite du Liban, has just closed its doors for the day.

“We say that we’re against the state putting another franc in Electricite du Liban,” says Nakad.

“Let the Energy Ministry set up a program to allow the private sector to enter the energy market and then supervise that sectors’ actions so that we can decentralize electricity. Meaning, so that every area in Lebanon has a power plant.”

Electricite du Zahle is on the front lines of a widely touted effort to let districts in Lebanon power themselves, though it is also waging a heavy battle against an Energy Ministry that has dealt a major financial blow to the nearly 85-year-old business.

In 1927, around 15 Zahle natives came together to set up the first of two power plants in their city of stone houses which extends gracefully off the banks of the Berdawni river. One of the plants is hydro-powered.

It was one of the first in a hodgepodge of energy companies in Mandate-era Lebanon. Electricity ran for 24 hours a day in that agricultural center, which doubled as a freight hub thanks to the Damascus-Beirut railway that ran through it.

After some intense negotiations to consolidate energy production in the country, Electricite du Liban monopolized power generation in 1972, conceding to Zahle, and three other private energy companies, rights to distribution. These businesses became known as concessions.

It was a time when Lebanon was producing energy at a surplus – it was a net exporter to Syria. The memory may be difficult to reconcile with the present day, when electricity runs for as little as 1 hour per day in some areas.

Today, Zahle is subject to power rationing along with other regions of the country, and that rationing is supplemented by private generator companies. However, its exclusive management of the district’s grid means that electricity consumption here is a markedly different experience.

Zahle’s power grids and services, which span 16 municipalities, are certified by the International Organization for Standardization, the world’s largest developer of voluntary International Standards. Copper cables that snake through the district are coiled in Torsade style, making theft more difficult and reducing the frequency of technical failure and electrocutions.

The network is also dotted with fault detectors and Geographic Information Systems, significantly facilitating the work of the company’s 24-hour maintenance crew.

During Lebanon’s war with Israel in 2006, when the country endured $114 million in infrastructural damage, Zahle’s repair crew was able to keep electricity running with rationing of 10 hours per day.

“Electricity here doesn’t work 24 hours a day, because of our rations of the government. But when it does, it works perfectly,” says Joe al-Kara, a native of Zahle.

“Electricite du Zahle is not only a commercial enterprise. It does a major public service; it’s definitely much better at the service than the EDL,” Kara adds.

Households in Zahle are equipped with electronic counters, or machines that provide details of the amount of energy consumed.

One of the most flaunted features of concessions like Electricite du Zahle is their bill-collection rate. Whereas payments to the state’s electricity are irregular and a little more than 60 percent, contributing significantly to the sector’s rapidly swelling deficit, concessions have achieved a nearly 100 percent collection rate.

“People trust us – that’s why they pay ... we have bills that come out monthly, unlike the EDL which holds off on billing and then suddenly bills as a lump sum.

“Our citizens can supervise their bills, and check them against their electronic counters,” explains Nakad.

Another citizen of Zahle, Christiane Issa, explains EDZ’s performance in different terms: “To the Electricite du Liban, I’m someone who’s far away, someone they can’t see. So why should they care if I have a problem with my electricity?”

“Asaad Nakad is part of a community. He has to show his face every day to his customers, so he has to stick to certain values,” she adds.

But EDZ is no different from other private companies in that it must make a profit in order to sustain itself.

It does this by purchasing its power allocation at a discounted LL45 per kilowatt and selling at EDL rates.

Energy and Water Minister Gebran Bassil has issued a decree removing discounts on concessions like Zahle, deeming them unfair to the rest of the public, which must foot the bill.

Nakad has taken the decision to the Shura Council, claiming that EDZ would have to shut down if the decree takes effect. It has thus been suspended.

The Daily Star has tried to contact the Energy Ministry for comment, but received no response.

In addition to fighting for the company’s survival, Nakad has repeatedly proposed to Cabinet that the languishing power plants of Zahle be reactivated. He says his letters to the Energy Ministry as well as to Prime Minister Najib Mikati have been ignored.

“[Zahle’s performance] explicitly shows you that the private sector could be more efficient than government agencies,” says Roudi Baroudi, secretary-general of the World Energy Council’s Lebanon member committee.

“To remove the concessions is a wrong thing. If the concessions stopped, who would take their place?” asks Chafic Abi Said, Lebanese Solar Energy Society former president.

He cited the current layoffs of freelancers at the Electricite du Liban due to the privatization of some of its services as an example of faulty administrative transitions in the sector.

At the start of The Daily Star’s interview with Nakad, the CEO was in the middle of a quick meeting with an administrator over covering the cost of an employee’s heart surgery.

“People shouldn’t confuse Zahle’s electricity company with the privatization efforts of the EDL. Just because we are private doesn’t mean that we’ll leave our employees out to dry when we don’t have use for them anymore ... they are our family,” Nakad tells The Daily Star.

A version of this article appeared in the print edition of The Daily Star on August 13, 2012, on page 5.




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