Lebanon, in its search for a solution to the chronic electricity crisis, has suffered the fate of “a thirsty man standing over a well yet unable to drink.” While officials toured Arab countries seeking to import electricity by land — and even went as far as to consider transporting it by sea from Europe through Cyprus — a city in the Bekaa Valley was shining alongside its neighbors, relying solely on sound management and planning. Yet this experience, despite its significance, remained largely ignored, even as some politicians boasted day and night about decentralization.

Since the 1920s, the Zahle Electricity Company had been granted a concession to generate, transmit, and distribute electricity in the city and its environs, similar to many concessions dating back to that era. When Électricité du Liban (EDL) was established in 1964 and granted exclusive rights to produce and transmit electricity, the Zahle concession retained only the right to distribute. Its role became limited to supervising and maintaining substations that convert medium-voltage current to low voltage, ensuring electricity delivery to subscribers’ meters, and collecting bills on behalf of EDL.

Providing Power Despite the Obstacles

What was striking during this period was Zahle Electricity’s high collection rate, reaching 99%, while non-technical losses in other regions exceeded 35% on average — and surpassed 50% in some areas — even though bill collection had been outsourced to service providers and companies tailored to suit influential figures and beneficiaries.

Things continued this way until outages and breakdowns in the national grid worsened, with rationing hours surpassing twenty hours per day. At that point, Zahle Electricity resorted to massive generators to stabilize the network and provide service to residents. Against all odds, it succeeded in securing round-the-clock electricity with a 100% collection rate starting in 2014.

Lawyer Marwan Issa el Khoury — who played a key role in the success of the project — explains that this initiative was implemented during the difficult circumstances that plagued the electricity sector in 2014–2015, when Zahle and surrounding villages endured long, repeated outages with no realistic prospect of improvement or increased power supply. Issa Khoury adds that relying further on EDL was neither a serious nor realistic option, making the creation of a private production capacity for Zahle and its region a form of genuine decentralization — a pilot project that later proved its effectiveness.

According to Issa el Khoury, the project was based on a principle confirmed through experience: the centralized electricity sector would continue to stagnate, yet it still allowed room for decentralization by permitting the establishment of an emergency power plant to add generation capacity without replacing the limited output provided by EDL. Over time, the project evolved from a pilot initiative into a “reference” or “model” project.

Despite the prominent role the company played in securing economic and social stability for a wide segment of residents and productive institutions in a highly important region, it was not spared attacks from opponents. Attempts were made to prevent it from generating electricity because this was an exclusive right of EDL. Debates over reclaiming the concession began in 2018 after the concession period expired. Disputes arose over whether this reclamation included machinery and equipment that were legally the sole property of EDL. Nevertheless, the company continued operating to this day, having transitioned from a historical concession into an operating contract with EDL. It has since become an example of administrative and financial decentralization, and a sophisticated model of electricity distribution — especially in a region long plagued by problems and breakdowns due to the sensitive relationship with subscribers.

Excellence Is Not a Coincidence

“These achievements were not a coincidence or the result of luck, but the fruit of a major and essential effort led by a group of people committed to improving Lebanon’s administrative and productive systems — foremost among them Lawyer Marwan Issa el Khoury,” says Assaad Nakad, Chief Executive Officer of Zahle Electricity. This was made possible “through the establishment of a legal framework that enabled Zahle Electricity (EDZ) to achieve administrative independence from Électricité du Liban (EDL) at a time when the concept of ‘administrative autonomy’ was still vague in Lebanese law.” Nakad notes that Issa el Khoury’s partnership with the company spans more than 25 years of fruitful cooperation.

This collaboration between sound management and legal-technical expertise resulted in a company covering 236 square kilometers, comprising 16 municipalities and more than 70,000 subscribers. Despite the major technical advancements — including the integration of solar energy alongside an environmentally friendly, low-emission power plant — the legal framework was a fundamental component of the company’s success. Legal expertise was crucial in enabling the company to negotiate, draft contracts, and work with international partners.

Nakad adds that “Issa el Khoury’s role was not merely technical but strategic. His legal and organizational experience, extending to Africa, made EDZ a trusted partner for foreign companies, in an environment where Lebanese entities are often viewed with suspicion.”

The second part of this report will examine how decentralization can be applied to the energy sector across other regions, especially following the appointment of the electricity regulatory authority and the passage of the renewable and distributed energy law.