Libya’s Economic Reform Salon proposes reforms for the country’s electricity sector

By Sami Zaptia.

London, 15 July 2020:

The Economic Salon, a Libyan policy reform think-tank made up of the country’s elite administrators, managers, politicians, activists, media personalities and business people, has proposed reforms for Libya’s ailing electricity and renewable sector. These involve short and medium-term reforms.

The reform paper clarified the nature, reality and features of the electricity and renewable energies sector in Libya, relying on issued legislation, official data, and publicly published statistics. It proposed a package of reforms and quick solutions to provide 1,200 MW of power in the short term needed to reduce the immediate shortfall, through the urgent completion of the halted power stations projects.

The proposal also recommended additional contracting with implementing companies and the purchase of electricity from neighbouring countries, but also the necessity of seriously changing consumer culture regarding energy rationalization and use with detailed suggestions as to how to achieve this.

With regards to the medium term, the reform proposal emphasised the necessity of restructuring and regulating the electricity and renewable energies sector by reviewing legislations, and regulations, and amending them in a way that serves the process of reform and development. This include the creation of a ministry that includes electricity, energy, oil and water, sharing the management and operation of transport and distribution services between the public and private sector. This would be done, the reform paper said, in preparation for extracting the state from the sector in the future, and encouraging competition between the private sector through bidding processes while the state retains its supervisory role.

With regard to the business model of the state General Electricity Company of Libya (GECOL), the company responsible for this sector, the reform paper stressed the need to stop government subsidies to the company and to make it responsible and accountable for its profits and losses, including its assets and liabilities, and transfer of ownership of some affiliated companies to the private sector.

The paper also made some recommendations related to the General Assembly, the Board of Directors, and the Authority Monitor.

It also focused on reducing expenses and increasing revenues of the sector by reviewing service purchase contracts, reducing the number of employees, stimulating bill collection, whether from government agencies or foreign companies, adopting modern technologies and adopting international costing standards.

The Economic Salon proposal concluded its recommendations by indicating that in order to head toward a more energy-efficient system, a digital transformation in the company’s services is required, imposing taxes on the import and purchase of non-energy-saving means, applying international standards in all aspects of the electricity and energy sector, and work towards the trend of solar and gas energy.

The full paper can be obtained in Arabic from the Economic Salon.

Copyright: The Libyan Economic Salon

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