A Turkish company threatened to switch off two floating power plants that provide about a fifth of Lebanon’s electricity, amid a dispute with authorities over corruption allegations and payments.
Lebanon’s Financial Prosecutor asked for Karpowership’s vessels to be seized pending an investigation into the renewal of the power supply contracts.
"We are alarmed at the actions taken by Lebanon’s Financial Prosecutor and firmly deny any violation of our contract or the law," a Karpowership spokesperson said in a statement late on Saturday.
The company was owed around $100 million by Lebanon in July last year, and the figure has since risen. The government is struggling to pay suppliers due to the country’s economic meltdown.
Karpowership has urged the government to engage in talks and served a final notice that it will suspend its services, the spokesperson said. The Turkish firm’s ships provide 400 megawatts of power and have been anchored off Lebanon’s Mediterranean coast since 2013.
"We strongly urge the authorities and the Republic of Lebanon to respect legal and contractual obligations and, crucially, to ensure rule of law," Karpowership said.
"Regrettably, we are now left without further options and have served a final notice of suspension of power generation services. We have worked for many months to avoid taking this action, and still hope a reasonable solution can be urgently reached so that we can continue to provide the lowest-cost and much-needed electricity to Lebanon."
Lebanon experiences regular power cuts and Karpowership’s absence would increase the strain on the state electricity company, known as Electricite du Liban. The utility is already struggling to run its plants at full capacity because it can’t afford to import the fuel for them.
Karpowership is also mired in a dispute in South Africa. It won most of a government emergency-power tender to provide electricity for 20 years. But state utility Eskom is concerned about the cost and length of the contract.