Paper short abstract:

Lebanon’s electricity sector is corrupt and dysfunctional. However, one local utility – Electricity du Zahle (EDZ) – has managed to provide a high quality and sustainable service. We explore how EDZ’s success has depended on clever navigation of Lebanon’s complex sectarian political settlement.

Paper long abstract:

The Lebanese electricity sector’s dysfunction and inefficiency mask deeper political economy challenges, including rampant rent-seeking, captured institutions and a fractured state. Over decades, corruption and mismanagement in Lebanon’s electricity sector has contributed to the draining of public finances and has deprived the Lebanese people of their right to reliable and affordable electricity.

Amidst the poor general state of the sector, one area of Lebanon has managed to operate a private utility that provides a reliable and high-quality electricity service – Électricité de Zahle (EDZ) – which covers the city of Zahle and 16 surrounding villages. EDZ’s technical losses stand at only 5%; it collects 100% of bills and is profitable while providing electricity at an overall cost no higher than that paid by households reliant on private generators.

Our study explores how it has been possible to establish EDZ’s functional, but problematic, service provision within the complex sectarian political context of Lebanon. We draw on a framework provided by Khan et al. (2019) to understand the rents and types of corruption in the sector and how the changes implemented by EDZ have been consistent with the nature of Lebanon’s political settlement.