Building Blocks for Developing an ESCO Market in Lebanon

In the past years, the power supply in Lebanon has become highly erratic, with the publicly provided, Electricité du Liban, electricity increasingly being replaced by expensive private diesel-powered generators that are a major source of pollution blanketing urban areas, with severe negative health impacts. Lebanon has substantial, largely unexploited, renewable energy potential: hydro, wind, and solar. Despite this potential, Lebanon has become extremely fossil fuel dependent with a highly inefficient power supply, power stations beyond their technical and economic life, and a sector characterized by waste, corruption, and inefficiency. Improving energy efficiency and changing the energy mix towards renewables are the first steps. Building an ESCO market should be an element in an inclusive energy policy within a more comprehensive economic policy and institutional reform framework.

This paper aims to set the basis for the development of an ESCO market in Lebanon in the coming years. This is done by identifying building blocks and analyzing best practices and trends, both at the international level, and specifically in the MENA region, focusing on the UAE, Saudi Arabia, Morocco, and Oman. It also dives into the nascent ESCO market in Lebanon, through the dissection of the current legal and institutional frameworks, before proposing concrete recommendations at the policy, technical, and financial levels.
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