The Zahle paradox: The electricity model Lebanon ignored for 40 years

Lebanon’s electricity crisis has long been portrayed as the inevitable consequence of technical deficiencies, insufficient generating capacity, deteriorating infrastructure and decades of political paralysis. The country’s debate over energy reform has consequently revolved around production targets, fuel procurement, international financing and emergency recovery plans, as though the principal challenge were one of engineering. Yet this explanation has always overlooked an inconvenient reality. For more than four decades, one Lebanese city has quietly demonstrated that uninterrupted electricity is not only technically feasible but also financially sustainable.

That city is Zahle.

While households across Lebanon have become accustomed to organizing their lives around generator schedules and power cuts, Zahle has lived according to a different reality. Electricity is available around the clock. Businesses operate without interruption. Hospitals function continuously. Water pumping stations remain operational, telecommunications infrastructure performs reliably, and industrial activity proceeds without the chronic uncertainty that has become synonymous with the Lebanese economy.

The significance of this experience extends well beyond municipal boundaries. It fundamentally challenges the prevailing assumption that Lebanon’s electricity crisis is the unavoidable product of limited resources or insurmountable technical constraints. If uninterrupted electricity has been successfully delivered under Lebanese political, economic and administrative conditions, then the country’s energy crisis cannot be understood solely as a failure of infrastructure. It must equally be examined as a failure of governance.

This was the central question that guided The Beiruter’s conversation with Assaad Nakad, Chairman of Électricité de Zahlé (EDZ), whose company has become the closest thing Lebanon possesses to a functioning electricity model.

What emerged from that discussion was neither a revolutionary technological breakthrough nor a sophisticated financial innovation. Rather, it was a remarkably coherent philosophy built upon managerial discipline, institutional credibility and political independence.

The origins of that philosophy date back to 1985, when Lebanon was still engulfed in civil war. Launching an electricity project under such conditions appeared almost counterintuitive. Bombardments regularly damaged infrastructure, public institutions were weakening and uncertainty had become the defining feature of daily life. Yet it was precisely within this environment that EDZ began constructing a model that would eventually distinguish itself from virtually every other electricity provider in the country.

Contrary to what many observers might expect, Nakad does not attribute the company’s success to technological superiority. Instead, he identifies reliability as the foundation upon which every subsequent achievement was built. Providing uninterrupted electricity twenty-four hours a day fundamentally altered the relationship between the utility and its consumers. Confidence gradually replaced improvisation. Households no longer structured their routines around blackout schedules, while businesses could plan production without constantly calculating generator costs or anticipating service interruptions.

That confidence generated consequences extending far beyond customer satisfaction. It encouraged subscribers to view electricity as a dependable public service rather than a scarce commodity to be exploited whenever available. In practical terms, this meant that consumers accepted the principle that electricity should be paid for because they consistently received the service for which they were billed. EDZ simultaneously eliminated illegal connections to its network, ensuring that only registered consumers remained connected. The result was a system in which virtually every unit of electricity delivered generated corresponding revenue, thereby establishing a financial equilibrium largely absent from Lebanon’s national electricity sector.

This distinction is particularly revealing. Électricité du Liban continues to face enormous technical and financial losses because a significant proportion of electricity distributed across the country is either never billed or never paid for. Under such circumstances, increasing production alone cannot restore financial viability. Every additional kilowatt supplied merely expands the scale of an already unsustainable deficit. Zahle approached the problem from the opposite direction: financial discipline preceded expansion. Consumers paid because the service was reliable, and the service remained reliable because revenues adequately financed operations. Reliability and financial sustainability therefore reinforced one another in a continuous cycle.

Such an outcome, however, was achieved neither effortlessly nor without resistance.

According to Nakad, the principal obstacles confronting EDZ were never limited to engineering challenges. From its inception, the project encountered opposition from the entrenched generator economy that had emerged throughout Lebanon during years of state failure. Private generator operators had effectively become indispensable electricity providers across large parts of the country, creating a lucrative parallel market whose survival depended upon the persistence of public sector deficiencies. Any initiative capable of delivering uninterrupted electricity inevitably threatened that economic order. Resistance, therefore, reflected more than commercial competition; it represented an attempt to preserve an established system of financial interests.

These pressures were compounded by the circumstances of war. The company developed while Lebanon experienced recurring violence, damaged infrastructure and widespread institutional fragility. That EDZ not only survived this environment but progressively expanded its capabilities offers an important lesson frequently absent from contemporary debates: stable institutions are not necessarily the product of favourable conditions; they may also emerge through sustained managerial consistency despite adverse circumstances.

The question naturally follows: if the Zahle model has demonstrated its effectiveness, why has it not been replicated throughout the country?

Nakad’s response shifts the discussion away from engineering and towards political economy. In his assessment, the principal barriers to expansion are neither technical nor financial but institutional. Extending uninterrupted electricity into neighbouring regions would directly challenge networks of economic interests that continue to derive substantial revenues from generator-based electricity production. Consequently, resistance to reform cannot be understood simply as bureaucratic inertia. It also reflects the incentives of actors who benefit from preserving the existing system.

Nakad repeatedly emphasized that his project had never been conceived as an initiative directed against any political party, community or institution. Before launching EDZ, he informed political leaders of his intentions but deliberately refrained from seeking their endorsement. The distinction is significant. His objective was not to transform electricity into a political project but to insulate it from politics altogether.

This principle of institutional neutrality emerged as one of the interview’s defining themes. Essential public services, Nakad argued, cannot operate efficiently when they become extensions of political competition or sectarian patronage. Electricity should reach citizens irrespective of their religious affiliation, political preferences or geographical location. Professional management must therefore replace partisan administration if confidence is to be restored.

Within this framework, Nakad regards privatization not as an ideological objective but as an administrative necessity. In his view, professionally managed private operators possess stronger incentives to maintain financial discipline, improve operational efficiency and remain insulated from political interference than state institutions constrained by changing governments and competing patronage networks. Privatization alone would not resolve Lebanon’s electricity crisis, but without professional and accountable management, meaningful reform would remain elusive.

Yet perhaps the most compelling dimension of the Zahle experience lies beyond electricity itself.

Reliable power transformed the city’s broader economic ecosystem. Continuous electricity enabled uninterrupted water distribution, strengthened telecommunications services and allowed hospitals to function without the costly dependence on emergency generation. More importantly, it created the predictability upon which investment depends. Industrial enterprises expanded production, agricultural businesses modernized their operations and commercial activity benefited from a level of operational certainty that remains exceptional elsewhere in Lebanon. Even public safety improved as illuminated streets reduced criminal opportunities and enhanced road security after dark.

Electricity, in this sense, should not be understood merely as another public utility. It constitutes the infrastructure upon which virtually every other sector of the economy depends.

Can the Zahle model therefore succeed elsewhere?

Nakad believes that it can, provided replication does not become imitation. Every Lebanese region possesses distinct social dynamics, local leadership structures and communal identities. Successful implementation therefore requires local ownership. Projects introduced by individuals deeply embedded within their communities are considerably more likely to establish the confidence necessary for long-term success than initiatives perceived as externally imposed. The model is transferable, but its leadership must remain rooted in the communities it intends to serve.

When asked what priorities would guide him were he entrusted with reforming Lebanon’s electricity sector, Nakad’s answer reflected the same philosophy that has defined EDZ for four decades. His first decision would be to eliminate illegal connections and restore the principle that every consumer must pay for the electricity received. His second would be to place the sector under professional private management capable of enforcing accountability, financial sustainability and operational efficiency.

These proposals are striking not because they are revolutionary, but because they are profoundly practical.

For years, Lebanon has searched abroad for solutions to a crisis whose most convincing answer has quietly existed within its own borders. The experience of Électricité de Zahlé does not suggest that the country’s electricity crisis is simple, nor does it imply that Zahle’s experience can be replicated mechanically across every region. It does, however, establish a proposition that has become increasingly difficult to dismiss: the fundamental obstacles to electricity reform in Lebanon are no longer technological, financial or managerial. They are institutional and political.

In that respect, the significance of Zahle extends far beyond the uninterrupted current flowing through its electrical grid. It stands as tangible evidence that Lebanon’s electricity crisis is not the inevitable consequence of national incapacity. Rather, it is the product of choices, incentives and institutions. Until those realities are confronted, the country will continue searching for solutions to a problem whose proof of concept has existed since 1985.