According to senior Lebanese officials, Iraq has decided not to renew its agreement with Lebanon regarding the provision of oil in return for services due to financial concerns.
It reportedly explains why the Central Bank of Lebanon has refused to approve a new $700 million credit line needed if Lebanon is to fulfill its obligations under the agreement. Reports say the stance of the bank stems from the failure of the Lebanese government to provide sufficient guarantees on repayment.
Lebanese Prime Minister Najib Mikati visited Baghdad, attempting to soothe the Iraqi government into overlooking Lebanon’s $700 million debt from the original agreement. His attempts failed.
Sources close to the deal said that in the same conditions as before, Iraqi Prime Minister Mohammed Shia Al Sudani decided to renew the deal for another $700 million without paying the old amount. This has increased Lebanon’s financial pledge to Iraq by more than $1.4 billion.
The Lebanese government asked the Central Bank of Lebanon to open a $700 million account to cover Iraqi services paid for in petroleum exchange. Saying no, the acting governor of the Central Bank, Wassim Mansouri, declared that the bank would pay these costs, standing in violation of Lebanon’s monetary policies and a choice by the nation not to provide further loans to the state.
Electricité du Liban announced on Sunday that the last operating unit of the Zahrani power plant had shut down due to a full depletion of gas oil supplies. The development sent Lebanon spiraling into a national blackout, knocking out power to the whole country, therefore upsetting important services including airports, ports, water systems, and prisons.
