meed-logo

line1 line2 line3
SIGN IN / REGISTER

Lebanon’s economic fate is in limbo

20 June 2024

Commentary
John Bambridge
Analysis editor

Lebanon is again in political and economic turmoil. Since the May 2022 elections resulted in a hung parliament, no prospective governing coalition has emerged, no prime minister has been named and no cabinet has been formed.

The situation then deteriorated in October 2022, when President Michel Aoun’s term ended without a successor being named, leaving the country without a president to even appoint a prime minister and so preventing the formation of a government altogether. This has left Najib Mikati in nominal charge as the country’s caretaker prime minister, but without a full mandate. 

This political stagnation is all too familiar for Beirut, with the previous Prime Minister, Hassan Diab, also staying on for 13 months after he resigned in August 2020 – until Mikati’s appointment in 2021. 

With Lebanon deep in an economic crisis, it has no time for this political chaos. By depriving the country of a government capable of pushing necessary economic reforms, Lebanon’s political class is condemning its people to yet more poverty. 

Since 2019, the Lebanese pound has devalued by 98% against the US dollar, leading to widespread shortages of essential services and goods. The banking system has buckled under the weight of the exchange rate collapse and is still holding people’s money ransom by limiting dollar withdrawals. 

Although inflation has recently dropped down into double digits, this relief is expected to be short-lived amid the instability being created by the war in Gaza.

The conflict on the southern Lebanese border between Hezbollah and Israel has intensified over the past eight months, leading to the displacement of over 90,000 people, and threatens to erupt into full-blown war. This disruption could hardly come at a worse time for Lebanon, robbing it of agricultural output and tourism just as these sectors were helping to stabilise food prices and foreign currency reserves, respectively. Israel has suggested that it could begin more serious operations in Lebanon from mid-June, raising the very real prospect of serious, if not catastrophic escalation in the near future. 

With no immediate prospect of conflict resolution on the horizon, analysts see very little near-term economic or political upside for Lebanon. Under the status quo, with Beirut in stagnation, the economy will continue to shrink; in the case of expanding conflict, it could slide rapidly back towards collapse. Only an imminent ceasefire on its border holds any real prospect of pulling the country’s once again worsening economic situation back from the brink.

MEED's July 2024 special report on Lebanon includes:

> GOVERNMENT: Lebanon marks two years without government
> ECONOMY: Gaza war postpones Lebanese recovery

https://image.digitalinsightresearch.in/uploads/NewsArticle/11960324/main.gif
John Bambridge

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Kafd monorail in Riyadh to commence operations in 2027

    25 August 2025

    Saudi Arabia’s King Abdullah Financial District Development & Management Company (Kafd DMC) is expected to begin monorail operations in 2027.

    According to local media reports, Faddy Alaql, chief asset delivery officer at Kafd, said construction is anticipated to begin by the end of this year, with the project ready for commissioning by 2027.

    The scope of work includes the construction of a 3.6-kilometre elevated monorail in a loop configuration, with six elevated stations and six trains – each consisting of two carriages.

    The monorail will connect public buildings within Kafd and integrate with the Riyadh Metro system.

    It is expected to carry up to 3,500 passengers an hour during peak times.

    In October last year, MEED exclusively reported that Kafd DMC had awarded an estimated SR1.2bn ($320m) deal to complete its monorail project at Riyadh’s King Abdullah Financial District.

    The contract was awarded to the joint venture of Egyptian contractor Hassan Allam and Chinese rolling stock provider CRRC.

    French engineering firm Systra is understood to have updated the technical and supervision studies for both systems and civil engineering works.

    Project background

    According to data from regional projects tracker MEED Projects, the scheme was put on hold in 2016 after a decade of planning.

    In 2010, Bombardier, now part of French firm Alstom, won a $241m contract to build the monorail.

    Bombardier, in partnership with local contractor Saudi Oger, was selected to provide its Innovia operation and maintenance services for the system over a 10-year period.

    Located in Riyadh, Kafd is a mixed-use development managed by Kafd DMC, a wholly owned subsidiary of the kingdom’s Public Investment Fund (PIF).

    The district was previously managed by Rayadah Investment Corporation.

    Construction contracts for several towers in the district were awarded in 2009.

    The project stalled when work was approximately 70% complete and later resumed in 2018, after the PIF took over from the Public Pension Agency in 2016-17.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14535623/main.jpg
    Yasir Iqbal
  • Iraq deploys Turkish power ships to ease electricity shortfall

    25 August 2025

    Iraq’s Ministry of Electricity has begun deploying electricity-generating ships to bolster the national power system. The first Turkish vessel, capable of producing 125MW, arrived at Umm Qasr Port on Thursday.

    Minister of Electricity Ziyad Ali Fadhil told the Iraqi News Agency that the ships are part of a government plan to add 600MW to the national grid while reducing reliance on imported fuel.

    “The Council of Ministers has taken decisions related to purchasing energy through barges to enhance the electricity system’s production and reduce dependence on imported fuel,” he said.

    The second vessel, Orka Sultan, arrived at Khor Al-Zubair Port in Basra province on Saturday. It docked at berth 13 and has the same capacity of 125MW, bringing the combined output of the two vessels to 250MW.

    Fadhil said the first barge will be fully docked at the quay within seven days of fuel delivery and will begin generating electricity within the same period. 

    Preparations are under way to supply gas oil fuel for the operation of both stations once the operating company takes over.

    The vessels are part of a project led by BKPS, a Karpowership affiliate, to deploy its signature powerships to support Iraq’s energy security.

    The deployment comes as Iraq faces near-nationwide blackouts, with recent temperatures as high as 50 degrees Celsius (122 degrees Fahrenheit) driving electricity demand for air conditioning.

    The country periodically suffers from power outages, especially during the summer months, when increased cooling requirements overwhelm its power plants and electricity grid.  

    The country’s power shortfall has been exacerbated by underinvestment in infrastructure, repeated heatwaves and disruptions to gas imports from neighbouring Iran.

    The Turkish vessels are part of a broader model of floating power stations, often deployed by companies such as Karpowership to countries needing electricity but lacking the time or resources to build permanent onshore capacity.

    Karpowership said in a statement that it will “provide electricity for an initial contract period of 71 days”, helping to stabilise the national grid and meet demand.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14534752/main.jpg
    Mark Dowdall
  • Acwa Power, SEC and Kepco close $4bn Saudi IPP deals

    25 August 2025

    Register for MEED’s 14-day trial access 

    Acwa Power, Saudi Electricity Company (SEC) and Korea Electric Power Corporation (Kepco) have achieved financial close for the 3,600MW Rumah 1 and Nairyah 1 independent power producer (IPP) projects in Saudi Arabia. The two projects represent a total investment of about SR15bn ($4bn).

    Saudi Power Procurement Company is the principal buyer for the projects, responsible for tendering and power offtake. Ownership of the project companies, Remal Energy Company for Rumah 1 and Naseem Energy Company for Nairyah 1, is split between Acwa Power (35%), SEC (35%) and Kepco (30%).

    The projects form part of the Saudi Energy Ministry’s plan to maximise local power supply in line with Vision 2030.

    They also support the kingdom’s net-zero 2060 target and allow for future integration of carbon capture facilities.

    Financing was secured from a syndicate of local, regional and international lenders, including Export Import Bank of Korea, Saudi National Bank, Saudi Investment Bank, Banque Saudi Fransi, Standard Chartered Bank, Bank of China, Agricultural Bank of China, Industrial & Commercial Bank of China and Arab Petroleum Investments Corporation.

    MEED reported in Novemeber that the Acwa, SEC and Kepco consortium had won the contracts to develop the two combined-cycle gas turbine IPPs. Tokyo-headquartered Mitsubishi Power was to supply the gas turbines to power the plants.

    The team offered a levelised electricity cost of 4.5859 $cents a kilowatt-hour ($c/kWh) for Rumah 1 and 4.6114 $c/kWh for Nairiyah 1.

    Rumah 1 involves the construction of a combined-cycle gas turbine plant with a capacity of 1,800MW in Riyadh Province. The project will be developed by Remal Energy Company with an investment of SR7.5bn ($2bn).

    Nairyah 1, also with a capacity of 1,800MW, will be built in the Eastern Province and developed by Naseem Energy Company. The investment value is about SR7.5bn ($2bn)

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14534558/main3558.jpg
    Mark Dowdall
  • Riyadh Metro Line 2 is a bellwether for Saudi construction

    25 August 2025

    Commentary
    Colin Foreman
    Editor

    Speaking to MEED at the end of the first quarter of this year, one of the region’s most active construction companies identified a bellwether project for 2025: the expansion of Riyadh Metro’s Line 2.

    At the time, much of the conversation in the market centred on the reprioritisation of projects in Saudi Arabia and expected budget cuts to some of the kingdom’s largest developments. The reasoning was that if the Line 2 project proceeded, it would signal that Riyadh remains committed to delivering key infrastructure.

    On 18 July, the Royal Commission for Riyadh City awarded the Arriyadh New Mobility Consortium the estimated $800m-$900m contract. A few weeks later, Riyadh Metro Transit Consultants, a joint venture of US-based Parsons and French engineering firms Egis and Systra, was confirmed as the project management and construction supervision consultant. 

    The 8.4-kilometre (km) extension, comprising 1.3km of elevated track and 7.1km underground, includes two elevated stations and three underground stations.

    It will run from King Saud University (KSU) to new stations at KSU Medical City, KSU West, Diriyah East and Diriyah Central – where it will interchange with the planned Line 7 – and finally to Diriyah South.

    The alignment is important as it provides a vital transport link for the $63bn Diriyah project and builds on the popularity of the existing metro network, which opened at the end of 2024.

    It also shows contractors that while there is talk of a reprioritisation, opportunities for work on major projects remain.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14534394/main.png
    Colin Foreman
  • Kuwait extends bid deadline for Mutriba upstream project

    25 August 2025

    Kuwait Oil Company (KOC) has extended the bid submission deadline for the contract to develop the planned Mutriba remote boosting facility in Kuwait.

    The project was originally tendered earlier this year, with a bid submission deadline of 29 June 2025.

    The deadline has now been extended from 17 August to 9 September 2025.

    The project has an estimated budget of about KD130m ($420m) and its scope includes:

    • Development of the Mutriba oil field
    • Installation of the degassing station
    • Installation of manifolds
    • Installation of condensate facilities
    • Installation of wellhead separation units
    • Installation of the pumping system
    • Installation of wellhead facilities
    • Installation of oil and gas treatment plants
    • Installation of a natural gas liquids plant
    • Installation of a water and gas injection plant
    • Construction of associated utilities and facilities

    The onshore Mutriba oil field is located in northwest Kuwait.

    In October 2024, KOC announced that it was preparing to tender a project management contract for a scheme to develop the field.

    At the time, it said four international companies had been invited to participate in the tender process.

    These were:

    • Schlumberger (US)
    • Halliburton (US)
    • Baker Hughes (US)
    • Weatherford International (US)

    KOC also said that the list of qualified companies could be extended before the invitation to bid was issued.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14531471/main.jpg
    Wil Crisp