According to high-level Lebanese sources cited by Leb Economy, Iraq has decided not to renew its agreement with Lebanon to supply fuel in exchange for services, citing financial concerns.
The refusal is as a result of the Central Bank of Lebanon’s decision not to approve a new $700 million credit line that was necessary for Lebanon to fulfill its obligations under the agreement. According to reports, the bank’s position is as a result of the Lebanese government not providing sufficient guarantees for repayment.
In an effort to persuade the Iraqi government to waive Lebanon’s $700 million debt from the initial deal, Lebanese Prime Minister Najib Mikati visited Baghdad. His efforts, however, were unsuccessful.
According to sources, Iraqi Prime Minister Mohammed Shia Al Sudani agreed to extend the agreement for an additional $700 million under the same terms as before, without paying off the debt from before. Lebanon’s financial obligations to Iraq have now increased to $1.4 billion as a result of this move.
The government of Lebanon has asked the Central Bank of Lebanon not to open a $700 million account to pay for Iraqi services in exchange for fuel. Wassim Mansouri, the acting governor of the Central Bank, said no, claiming that the bank would have to pay for these expenses, which would be against Lebanon’s monetary laws and the country’s decision not to give the state any more loans.
Following the announcement on Sunday by Electricité du Liban that the last operational unit at the Zahrani power plant had shut down due to a complete depletion of gas oil reserves, Lebanon was plunged into a nationwide blackout. The outage has cut off power to the entire nation, disrupting vital services like prisons, ports, water systems, and airports.
