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UPDATE 2-Turkey's Karpowership shuts down power to Lebanon

·2 min read

(Adds company statement, paragraph 5)

By Edmund Blair and Can Sezer

BEIRUT/ISTANBUL, May 14 (Reuters) - Turkey's Karpowership, which provides electricity to Lebanon from two barges, said on Friday it was shutting down supplies over payment arrears and a legal threat to its vessels as the nation grapples with a deep economic crisis.

The company, which supplies 370 megawatts (MW), or about a quarter of Lebanon's current supply, told the government this week it would have to shut down unless there were moves towards settling the issues.

The shutdown threatens longer daily power cuts across the heavily indebted nation, which did not have enough capacity to meet demand even before Karpowership's move on Friday.

Many people in the country, which has seen its currency collapse since a crisis erupted in late 2019, rely on private generators or struggle for many hours a day without power.

"For 18 months we have been exceedingly flexible with the state, continually supplying power without payment or a payment plan, because the country was already facing very hard times. However, no company can operate in an environment with such direct and undue risk," Karpowership, a unit of Karadeniz, said.

A source familiar with the situation said generators were powered down starting from about 8 a.m. (0500 GMT).

The source, speaking on condition of anonymity, said arrears exceeded $100 million, and said the government had not sought talks to resolve the arrears despite the firm's repeated appeals to avert a shutdown.

A Lebanese prosecutor threatened this month to seize the barges and fine the firm after Lebanese TV channel al-Jadeed reported corruption accusations over the power contract. The firm denies the charges.

Lebanon's Finance Ministry said this week it had received a letter from the Turkish firm with warning, citing a lawmaker saying the country could face "total darkness" if the barges shut off power. It has made no public statement about any talks.

Each of Karpowership's barges has a capacity of 202 MW, against a contract to supply 370 MW.

An industry source said Lebanon's total capacity was about 2,200 MW, including the barges, but was only generating 1,300 MW, including the Turkish supplies of 370 MW. Lebanon’s peak demand in 2020 was 3,500 MW, the source said. (Reporting by Can Sezer in Istanbul and Edmund Blair in Beirut; editing by Clarence Fernandez and Jason Neely)