The offices of Electricite du Liban in Beirut on August 17, 2024.  EPA
The offices of Electricite du Liban in Beirut on August 17, 2024. EPA

Lebanon's state electricity company runs out of fuel, sparking blackout fears



Lebanon's state electricity company (EDL) announced on Saturday that it could no longer supply power after its last operational power plant exhausted its fuel reserves.

The company said the situation would affect “essential facilities such as the airport, port, water pumps, sewage systems, and prisons.” It also noted that from noon on Saturday, it “resulted in a total power cut” of state electricity across Lebanon.

Soon after, the south Lebanon Water Corporation urged people “to save water as much as possible” because the blackout would have a “significant impact on its ability to pump water in sufficient quantities”.

State electricity blackouts because of fuel shortages are common in a country that is heavily reliant on generators for power.

However, this cut comes amid growing fears of an all-out war between Hezbollah and Israel, who have been engaged in daily cross-border clashes since October 8, parallel to the war in Gaza.

When the two sides last fought a war in 2006, Lebanese fuel storage tanks were among those to be attacked by Israel. Along with Israel blockading the Lebanese coast, it led to the near exhaustion of fuel supplies.

State electricity in Lebanon is available for a maximum of around four hours a day. Those who can afford it rely on expensive diesel-powered private generators to fill the gap, although very few provide power for 24 hours.

Lebanon has long struggled to provide enough power to its people, but the problem has been exacerbated by an economic crisis that began in 2019. Lebanon, which has few natural resources, imports heavy fuel oil from Iraq under a swap deal signed in 2021.

As the heavy fuel supplied by Iraq does not meet Lebanon’s fuel specifications, the deal allows Beirut to swap it on the international market – through traders who make a profit – for other types of oil suitable for its power plants.

However, payment issues from Lebanon to Iraq have caused problems. Although the Lebanese cabinet approved a series of measures on Wednesday to help alleviate the issue, the benefits did not come in time – with the next Iraq fuel delivery not expected until the end of August.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
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Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

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Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.

A semen analysis of the father showed abnormal sperm so the couple required IVF.

Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.

A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.

On day three of the process, 14 embryos were biopsied for gender selection.

The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.

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Updated: August 17, 2024, 4:14 PM