Lebanon has signed a $360m, three-year contract to lease two electricity-generating ships from Turkey’s Karkey Karadeniz Elektrik Uretim, which are expected to generate 270 MW of much-needed electric power.

The government is expected to utilize the power ships to substitute for some of the country’s aging power plants, which are scheduled for extensive repairs, and could result in a fall in current daily electricity rationing by one to two hours.

Gebran Bassil, Lebanon’s energy minister, also confirmed the deal could enable the state-run Electricite du Liban to make significant savings in fuel costs – ranging from $30m to $130m a year.

Lebanon’s current electricity production is around 1500 MW, which is dwarfed by a 2400 MW demand.

This huge deficit renders the country vulnerable to severe power rationing, and outside of Beirut this often exceeds 12 hours a day.

According to Bassil, the power ships would produce energy at rates of around $0.06/kWh, which is significantly less than Lebanon’s current energy costs of $0.17/kWh.

Commenting on the deal, the Turkish ambassador to Lebanon Inan Ozyildiz said the contract was the largest business agreement between the two counties, and that Turkey was ready to get involved in more projects to help Lebanon revitalize its electricity sector.

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