Executive Magazine

Outlook brightens for renewables

by Jeremy Arbid December 30, 2016

written by Jeremy Arbid

Renewables are the energy source of the future. Not too many years back it was hard to conceive that the sun’s rays could be harnessed into electricity – those what-will-the-future-look-like Laserdisc videos students were forced to watch when the substitute teacher covered 8th grade Life Science just didn’t seem that realistic. While planet earth may not be the utopian dream thought up then, today renewable energy is more and more the source of power charging our smartphones, lighting our homes and cooling our places of work.

Today the outlook for renewables is promising, linked to international commitments to reduce greenhouse gasses agreed to at the Paris Agreement in December 2015. There, Lebanon committed to reducing gas emissions by up to 15 percent unconditionally and by as much as 30 percent, depending on the provision of international support, both by 2030 (see climate change article). Alongside installing more renewables on the path to achieving emission reduction targets, Lebanon will need to restructure its electricity sector but, as it stands now, there is seemingly no will to reform.

In terms of renewable energy generation Lebanon has made progress. By the end of 2015, Lebanon had installed 9.45 megawatts of solar photovoltaic, according to a September report published by the United Nations Development Programme’s (UNDP) Small Decentralized Renewable Energy Power Generation (DREG) project. The cost of installing solar photovoltaic at factories and commercial facilities has fallen from $5.3 per watt in 2010 to $1.7 per watt in 2015, while operating savings from Lebanon’s photovoltaic installations have risen from $191,000 per year in 2010 to $2 million per year in 2015, according to the DREG report. In terms of climate change, solar installations have a measured carbon reduction, initially removing 351 tons of CO2 in 2010 and increasing to 18,000 tons of CO2 in 2015. The cost of removing one ton of CO2 can thus be calculated at $198, a figure that would dramatically decline were Lebanon able to install utility-scale (20 megawatts or more) solar photovoltaic projects (see The Lebanese solar revolution).

The cost of removing carbon is an important indicator to finance renewables. For international donors it doesn’t matter where in the world the reduction of carbon occurs as long as it’s done at competitive costs – for them. The impact of their funding will be the same globally whether a ton of carbon is no longer emitted in Lebanon or elsewhere.

Despite the obstacles preventing renewables’ scalability, there is local money available to finance installations. Lebanese businesses have the option of subsidized loans for renewables and energy efficiency projects through low interest rate loans distributed by commercial banks – a funding mechanism known as the National Energy Efficiency and Renewable Energy Action (NEEREA). Of the more than $350 million that NEEREA is said to have channeled into renewables and energy efficiency between 2012 and 2015, solar photovoltaic reached only $30.5 million cumulatively since 2010, according to the DREG report. That small chunk put toward solar may be due to the obstacles blocking its scalability and because of the political and financial risks in reforming the electricity sector. But the limited uptake of NEEREA money for solar might suggest that some energy efficiency projects are crowding out more worthy emission reduction investments, Executive has previously reported.

There are legal and technical obstacles preventing the scalability of renewables that will need to be addressed moving forward – namely the lack of a net-metering scheme (a billing mechanism crediting renewable energy providers for feeding electricity into the public grid) and the gap in Electricité du Liban (EDL)-supplied electricity blocking renewables from offsetting carbon emissions from the dirtier electricity produced by private generators that many homes and businesses connect to off-grid. The electricity sector demands reform, but, as it stands now, there is simply no will. Without restructuring, foreign donors will have zero appetite for fixing the grid, and private investors see no upside in pouring money into the bankrupt utility.

But the opportunity for Lebanon to restructure its electricity sector has never been more ripe. The momentum of the climate change agreement and a fall in oil prices provide a unique platform for debate in 2017 on how the country powers itself.

Failed reforms

Imagine investing the $2 billion of annual subsidies to EDL into renewables for one year, a dream scenario that the head of the ministry of environment’s climate change team, Vahakn Kabakian, proposed in an interview to Executive earlier this year.

EDL is a huge drain on the state’s coffers because of the significant subsidy at which electricity is generated and sold to the public. Since 1996, the government has helped cover the cost of generation, capping the purchase of fuel by EDL at $25 per barrel, with the treasury covering the difference. EDL also sells electricity at the fixed rate of 75 LL ($0.05) per kilowatt hour to distributors, while subscribers are charged on average only 133 LL ($0.09). “This decision has to be changed – we are simply unable to continue to subsidize the sector in the same way,” Ministry of Finance Director General Alain Bifani told Executive last year. The treasury was transferring some $2 billion per year until oil prices dropped in 2015 – leading to a decrease in subsidies to EDL from $1.4 billion during January to August 2014 to $520 million over the comparable period for 2016, according to ministry of finance figures (see EDL subsidies chart).

But rather than take advantage of the chance for reform it was, in the past year at least, business as usual in Lebanese politics.

[pullquote]EDL is a huge drain on the state’s coffers because of the significant subsidy at which electricity is generated and sold to the public[/pullquote]

Last fall, the Amal Movement and the Future Movement accused former Minister of Energy and Water Gebran Bassil and his Free Patriotic Movement of incompetence in the tendering and implementation of contracts for electricity projects and of misspending some $1.2 billion. In 2010, everything looked good on paper for the electricity sector. Bassil had put forth a master plan that by now would have delivered 24 hours of uninterrupted electricity generated cheaply by clean burning natural gas.

Ghazi Youssef, a Future Movement parliamentarian, accused Bassil in a September 2015 interview with Executive of focusing on the wrong priorities, incompetence and corruption. He says Bassil focused on rehabilitation projects at the Zouk and Jiyeh power plants, calling them low-hanging fruit, when he should have been focused on big picture projects that would significantly upgrade Lebanon’s generating capacity.

Bassil seemingly did bungle a tendered contract to build a 535 megawatt power plant at Deir Ammar worth $660 million by consortium Abenor-Butec, reneging on the contract when the consortium refused to lower the agreed upon price by $160 million. The project was re-tendered and awarded to a consortium led by Cypriot firm J&P, but a dispute over the payment of the project’s $50 million VAT delayed construction.

Accusations aside, Bassil’s plan to install an additional 1,500 megawatts of electricity generating capacity made no progress, largely because the plans to construct new power plants stipulated public-private partnerships – a scheme requiring legislation that every politician seems to support but that has not been passed into law by the parliament. Lebanon currently has 1,500 megawatts of installed capacity, with that number set to rise as new reciprocating generators were scheduled to come online at the Zouk and Jiyeh power plants in 2016 – sources tell Executive that the Zouk installation is complete but not yet switched on.

Demand, however, continues to exceed production capacity by an average of some 800 megawatts, with the gap being filled by private generators. Every month the Ministry of Energy circulates a list suggesting a price at which private generators should offer 5 and 10 amps to subscribers – and the ministry of economy has a hotline for consumers to report price violations – but it is not clear how well the policy is enforced. The business of private generation is a lucrative one which, according to a 2011 ministry of energy study, was worth $1.7 billion per year.

Progress was made in privatizing some of EDL’s activities – those tasks of network operation and maintenance, metering and bill collection. But the revenues collected by the three main contracted distributors, BUTEC, KVA and NEU, are not published, nor are the financial books of EDL. The only indication is from EDL’s contribution to the bill of oil imports, $25 million in 2015, according to BlomInvest Bank.

Private initiatives

Bickering at the political level has highlighted opportunities for Lebanon’s private sector to step into the business of electricity generation, some with more success than others.

Bassil’s plan for 24 hour electricity has, obviously, not fully materialized. That has left individual areas to come up with their own plans to produce electricity – starting in Zahle in 2015, with plans announced for Jbeil (Byblos) and Tripoli.

[pullquote]Bickering at the political level has highlighted opportunities for Lebanon’s private sector to stepinto the business of electricity generation[/pullquote]

In 2015, Zahle implemented a local plan to bring some 53,000 subscribers 24 hours of electricity by generating 48 megawatts of power. Assaad Nakad, chairman of Electricité de Zahle (EdZ), has not responded to Executive’s requests to fully understand the plan. Byblos Advanced Energy (BAE) has plans to build a 64 megawatt power plant in Jbeil to serve nearly 28,000 customers, a total investment requiring $68.4 million, Executive reported last December. The project is shovel ready but is awaiting license approval by cabinet. Its principal Mario Chelala said that no progress had been made – “from promises to promises, we are still stuck,” he wrote to Executive in an email in December 2016.

For Tripoli there are two plans to supply the city with 24 hour electricity. Najib Mikati, a former prime minister, established Nour al-Fayhaa, but in announcing the new electricity company in September 2015, he offered few details on how the new entity would generate electricity for the some 600,000 customers in Greater Tripoli. The other plan announced this October, by Tripoli businessman Mohammad Adib and EdZ chairman Nakad, would generate 150 megawatts. Representatives for the plans did not respond to Executive’s inquiries to understand the technical details.

Lebanese would welcome 24 hour electricity; in most countries what is a basic public service is in Lebanon a luxury for those who can afford two utility bills. The private sector initiatives are certainly welcome and are not to be discarded if the plans achieve what they promise – around the clock power for homes and businesses. But it may be too much to ask for private sector plans to incorporate renewables in their electricity generation schemes, especially given the legal, technical and political obstacles they face.

December 30, 2016 0 comments

Lebanon’s economy weathers a tough 2016

by Jeremy Arbid December 29, 2016

written by Jeremy Arbid

If there is one resolution Lebanon can commit to this coming new year, it is making good on the opportunity for a fresh start, to restart government institutions and implement sound policies that will guide the country toward a more promising future.

A sputtering Lebanese economy, exasperated by a disruption in regional trading due to the ongoing civil war in neighboring Syria, the refugee crisis it has perpetuated, the deterioration of public services like garbage collection and electricity because of an impotent government and American financial sanctions targeting Hezbollah, among many more crises, brought Lebanon to the brink of state failure in 2016. With the election of a president in October, there could be a way out of the darkness, and if the almost two and a half year political stalemate is nearing an end, then the question on many minds is: what steps can a new government take to right the economic ship? Everyone seems to be wishing for the same thing this holiday season: a better economic outlook in 2017.

For Lebanon, economic growth has slowed dramatically. In 2010 gross domestic product (GDP) growth reached 8 percent. This year, the World Bank estimates the economy might grow by up to 1.8 percent, while the International Monetary Fund (IMF) projects only 1 percent growth in 2016. But, from the point of view of several Western ambassadors that Executive spoke with in November, the hope is that a resolution to the country’s political impasse is in the cards. The election of a president, followed by the appointment of a government, hopefully before the end of 2016, that would oversee parliamentary elections (whose current members were elected in 2009 and extended their terms twice) in late spring 2017, could, depending on its policy priorities, usher in a period of stability encouraging economic growth.

Exports have been one of the clearest indicators of Lebanon’s economic slowdown. In 2012, the country exported almost $4.5 billion worth of Lebanese goods and produce. By 2015, those products had declined to less than $3 billion in value, and so far this year exports totaled almost $2.3 billion by September.

[pullquote]The hope is that by the end of 2017 Lebanon will be able to reorient its exports to new international markets and spur absorption of Lebanese products in the local economy[/pullquote]

The reason for the decline is largely due to the disruption of land routes through war-ravaged Syria to markets in the Gulf and a drop in Lebanese exports to the Syrian market, one of its larger trading partners. Exports to Syria declined from a 2013 high of $500 million to less than $130 million through September of this year. More generally, Lebanon has also witnessed a slowdown in local manufacturing output due to the depressed local and regional economies. The hope is that by the end of 2017 Lebanon will be able to reorient its exports to new international markets and spur absorption of Lebanese products in the local economy (see industry overview).

Lebanon has not been alone in its economic woes. The entire region has been in a recession since the start of the so-called Arab Spring in 2011, compounded more so by the civil war in neighboring Syria. The region’s GDP by 2015 had declined on average to a growth rate of less than 1 percent, a recently published report by the UN Economic and Social Commision for Western Asia (ESCWA) found.

The report cited falling oil prices, slower domestic demand expansion and weaker business confidence for the overall economic slowdown in Gulf countries, as well as knock-on effects from regional conflicts and the refugee crisis from Syria’s civil war.

It is the fall of oil prices that could reshape the political and economic landscape of the Middle East in the coming year, according to energy and political analysts. “Now that oil prices are declining and will likely continue to remain low for several years, if not permanently, the Middle East’s rentier systems face a significant challenge…If Middle Eastern countries do not start making real progress on fundamental political and economic reforms, further regional turmoil is inevitable,” Marwan Muasher, vice president for studies at the Carnegie Endowment for International Peace, deduced in a November 2016 article.

Rentier economies, such as Saudi Arabia, have previously propped up other regional countries with financial support, and the recent shift from grants to investments, Muasher continues, “will put pressure on those governments to pursue private-sector growth to improve their own countries’ economic performance…expect to see further opposition from state bureaucracies, which lack any vision for a transition to an inclusive and sustainable economic model.”

[pullquote]The government and parliament have largely reduced their activity to reactionary decision-making and emergency legislation[/pullquote]

In Lebanon, lower oil prices have provided some flexibility in terms of lower financial transfers from the treasury to the public utility, Electricite du Liban (EDL), because of its shortcomings in bill collection revenue and other inefficiencies in producing and distributing electricity. This has resulted in a decrease in subsidies from some $1.4 billion from January to August 2014, to $520 million over a comparable period for 2016, according to ministry of finance figures.

Last year, Ministry of Finance Director General Alain Bifani told Executive that subsidies to the public utility are not sustainable and that while the fall in oil prices has provided some breathing space in terms of the state’s fiscal situation, this “should be pushing us for immediate action whilst we have this breathing space.”

Taking advantage of the opportunity does not appear likely in the near term, as political and confessional obstacles have continually hindered a restructuring of the electricity sector despite its drain on public finances and have led to a 2010 government plan to reform EDL to be ignored. The accruing debt on investments in and transfers to EDL, according to the World Bank, amounts to 40 percent of Lebanon’s gross public debt – and transfers to EDL now account for over 50 percent of the fiscal deficit.

Deficit grows

Despite smaller allocations to EDL, by August the budget deficit had widened to $2.5 billion, a rise of nearly 27 percent over the same period in 2015, with government expenditures totaling around $9.4 billion so far this year. Public debt is estimated by the World Bank to reach some 149 percent of gross domestic product by the end of the year (the IMF projects the debt-to-GDP ratio to reach 144 percent in 2016), and gross public debt is expected to continue to grow largely due to the servicing of public debt.

It is unlikely, however, that the new government, whenever it is formed, will adopt the budget proposal for 2017 (Lebanon has not ratified a budget since 2005) to reign in public spending because its main priority will be the organization of parliamentary elections sometime next year, despite the urging by economists, bankers and international monetary institutions to pass a budget.

With no fiscal policy in place, Banque du Liban (BDL), Lebanon’s central bank, has stepped in to shore up Lebanon’s sputtering economy. BDL claims that its stimulus packages ($1.46 billion in 2013, increased by $920 million in 2014, an additional $990 million in 2015 and another $1 billion more announced this November), whose primary role has been to spur job creation, have made a “sizeable contribution to GDP.” BDL says that “the stimulus packages of 2013 and 2014 proved to be successful, contributing around 50 percent of real gross domestic product growth,” as Executive has previously reported, but the data to corroborate the claim has not been made available to the public.

In its fall 2016 issue of Lebanon Economic Monitor (LEM) the World Bank, in assessing the efficacy of BDL’s stimulus packages since 2013, points out that “no elaborate studies…of the effects of BDL’s subsidized lending programs on economic growth or job creation exist.” In a 2013 issue of LEM, the World Bank projected that the impact of the first stimulus was expected to be limited: “BDL’s stimulus package could boost GDP growth by 0.2 to 0.3 percentage points.”

Where the stimulus packages have had a large impact is in propping up Lebanon’s real estate sector. Nearly 76 percent of loans subsidized by the stimulus packages have gone to the housing sector between March 2012 and March 2015, according to figures cited by BDL’s director of financial operations, Youssef el Khalil, at an event hosted by the American University of Beirut (AUB) in November, in order to keep the sector afloat (see real estate overview).

Strain on the banks

One of the biggest stories of the year was the implementation in May of an American law targeting Hezbollah – the Hezbollah International Financing Prevention Act (HIFPA). Once again, BDL stepped in to fill the void of foreign policy, financial and economic leadership vacated by an impotent government – issuing circular 137 for Lebanese banks to comply with the US law.

While parliament did pass legislation to patch up anti-money laundering and counter-terrorism financing rules to meet international standards and safeguard Lebanon’s banking sector, it had virtually no leverage to soften the impact of American rules. Remembering the forced closure of the Lebanese Canadian Bank in 2011, local officials earlier this year were concerned that HIFPA would disrupt Lebanon’s banking sector, blowing up the Lebanese economy in the process.

For the most part that didn’t happen. One source familiar with Lebanon’s banking sector told Executive in November that the American legislation has had a significant psychological effect on Lebanon’s banking sector and among the political elite, but the actual impact in terms of the number of bank accounts affected is not clear but probably limited. Of the more than 100 individuals and entities sanctioned due to that law, one might presume the number of accounts and assets frozen are not significant. The source said that there is less concern of money being moved through the banking system, but rather of it being moved through informal cash and goods transfer networks like Hawala. Citing banking secrecy, BDL’s Special Investigation Commission, Lebanon’s anti-money laundering authority, in November would not disclose to Executive the aggregate number of accounts affected by the US law. When reached by telephone in early November, Yassine Jaber, a member of parliament representing the Amal Movement, a Hezbollah ally, said nothing has happened in the interim and that there wasn’t anything to talk about, declining to comment further.

While the American legislation did not blow up the Lebanese economy (the main office of Blom Bank, however, was bombed), it did further emphasize BDL’s role in the absence of real governance and policymaking. The government and parliament have largely reduced their activity to reactionary decision-making and emergency legislation, rather than proactively addressing the many systemic challenges that the country faces.

Speaking generally on policy making, Hiba Khodr, a professor of public policy at AUB, says Lebanon has good policy proposals and policy research. “We just don’t have a policy agenda, and we don’t define our policy interests,” Khodr said at a November panel discussion hosted by AUB’s Issam Fares Institute for Public Policy. Fadia Kiwan, the director of the Institute of Political Science at Beirut’s Université Saint-Joseph, added that political parties do not focus on policymaking because they are mostly concerned with confessional quotas and obtaining ministries that have the most power or resources they can use to benefit their constituencies.

The election of a president was the first step toward defining government priorities and a renewal of state institutions that will give decisionmakers in the private sector, the banking community and other economic stakeholders a sense of direction moving forward. Whether Lebanon’s economy will improve in 2017 is a question that only time can answer.

December 29, 2016 0 comments

Editorial Opinion

Starting afresh

by Yasser Akkaoui December 28, 2016

written by Yasser Akkaoui

While 2016 was full of surprises, in our own backyard the year’s developments simply helped reconfirm what we already know and once again exposed the extent of our vulnerability and dependence. Our region’s fate is in the hands of superpowers, influenced by any number of special interests except, of course, the best interest of local populations. The year proved human life has no value to those who will decide our fate. It proved our lot is not to make decisions, rather to wait until decisions are made for us.

In Lebanon, the effects of this are becoming embarrassing. We have a president now, but it seems that we are still destined to wait for international deals to be struck that will help define our future. In the meantime, gross mismanagement in the public sector deprives us of even the most basic services (electricity, water, garbage collection and disposal). The only functioning institution in this country is Banque du Liban (BDL), the central bank. We cannot prove that the BDL stimulus package contributed to half or more of our GDP growth in each of the past three years, but it’s hard to think of a positive development in Lebanon since 2010 that does not have BDL to thank. Subsidized environmental loans are building a renewable energy industry, subsidized housing loans and other assistance are propping up the real estate sector and guaranteed investments are giving a turbo-charged boost to an entrepreneurship ecosystem, building on over a decade of organic growth. Imagine if our ministries were all as well managed. Imagine the cumulative effect if each minister could say he or she helped contribute half a percentage point to growth in 2016. The more I think about this country, the more I’m convinced that economic independence is a prerequisite for political independence, both locally and internationally.

Individual Lebanese are often as dependent on their local political bosses as those bosses are dependent on their foreign sponsors. If we can’t break the links at the top of the chain, our only hope is to break them at the bottom. It seems clear that spring will bring with it parliamentary elections, albeit with an unfair law. This is not ideal, but it still provides at least an opportunity for liberal-minded candidates with a real vision for this country’s future to succeed.

My hope for 2017 is that at least a few of these candidates can contaminate our corrupt, rotten parliament with new blood and new ideas. We are encouraged by foreign voices, who all expressed their trust in Lebanon on this issue. I hope for members of parliament to be guided by their conscience and love of country, not blinded by political allegiance. I hope for representatives who will alleviate the people’s suffering and mitigate the effects of mismanagement that have been holding Lebanon back for too long. We have to break the chain. In 2017, we start.

December 28, 2016 0 comments

Climate change Economics & Policy

The momentum against deniers

by Talal F. Salman & Vahakn Kabakian December 5, 2016

written by Talal F. Salman & Vahakn Kabakian

The historic Paris Agreement

The international agreement on reducing greenhouse gas emissions that came into place a year ago in Paris was a fruitful outcome of more than two decades of hard work and negotiations by the international community and aims at limiting the increase in the temperature of the planet to 2 degrees Celsius by 2100. Now that there is no dispute scientifically on the impact of human activities on our planet, the very existence of humans and the ecosystem that supports their lives is threatened in the case of inaction, resulting in floods, poverty, diseases, lack of food, lack of water and disappearance of nation states.

The Paris Agreement is supposed to be the beginning of the end of the hydrocarbon age, and the move toward clean energy, in addition to finance and technological support by developed countries to developing countries and, more importantly, to vulnerable countries. A consensus was reached over the years that developed countries are the reason behind the abnormal increase in the temperature of the earth due to industrial activities, and as a result developed countries will collectively commit to financing $100bn per year as of 2020, which would be spent in two areas: 1- adaptation: helping developing and vulnerable countries adapt to the change in climate affecting their livelihood such as water and food security 2- mitigation: helping developing countries reduce their emissions in the future in order to meet their national emission targets, which they need to commit to as part of the agreement.

Marrakech Conference of the Parties (COP) 22

This year’s climate conference, the largest United Nations event on climate change, hosted generously by the king of Morocco in Marrakech, witnessed the first year in preparing for the implementation terms of the Paris agreement, which will take effect in 2020. Shortly before the conference, the threshold required for the agreement to come into force was surpassed, and currently 113 countries out of 197 have ratified it, most importantly the largest emitters, the USA and China.

This year’s conference was trumped (pun intended) by the result of the US presidential election. The entire mood of delegates and negotiators was tilted by rather a trivial question but an important one, what will be Trump‘s influence on climate change? With the election of Donald Trump in the USA, the international community, and at least half of the American population, is afraid that Trump will take action on his campaign rhetoric and back down from the Paris agreement. French President Francois Hollande made his concerns clear in the opening speech at the Marrakech conference reminding the incoming US administration that the agreement is irreversible and that “U.S. citizens are aware that if the level of the Oceans rises, if natural disasters continue, if migrations persist, if crises erupt, then America will necessarily be concerned”. Secretary of State John Kerry reaffirmed the United States’ commitment to the Paris agreement and attacked Trump by saying “no-one has the right to make decisions that affect billions of people based solely on ideology or without proper input”. Moreover, the secretariat of the conference reiterated the irreversibility of the momentum to implement the measures to fight climate change in a statement at the end of the conference. If Trump were to withdraw from the Paris agreement to the pleasure of oil and coal companies, it would indeed pose a drawback on a crucial momentum, but the good news is that this would take it 4 years to do so, by which time the world would hope Trump will not win a second term. 4 years is a rather long period, and several things might happen; already President-elect Donald Trump conceded on Tuesday (November 22, 2016) that there is “some connectivity” between human activity and climate change and wavered on whether he would pull the United States out of international accords aimed at combating the phenomenon, which scientists overwhelmingly agree is caused by human activity. The statements could mark a softening in Trump’s position on US involvement in efforts to fight climate change, although he did not commit to specific action in any direction.

Additionally, there are many states in the US with emission cuts that surpass the requirements of the agreement and can act independently from Washington given the federal system. For example, California, the largest state economy in the US, which is the size of the French economy and double the Russian economy, is aiming to reach 1990 emissions levels by 2020, hence reversing the emissions trend through a bigger share of clean energy use.

Overall, a key outcome of this year’s conference is the agreement of countries to finalize the rules of the Paris Agreement by 2018. Indeed, that agreement was made, ensuring that countries are kept on track to raise the ambition of their national climate plans in 2020 – a crucial part of meeting the goals set out in the Paris Agreement. Countries also set in motion a process to define the “stocktaking” methodologies in 2018, which is a process that evaluates progress in cutting emissions and ensure the climate action taken is enough to meet the target reduced emissions. The conference also provided an opportunity for cities and businesses to advance climate action plans of their own, covering many sectors including transport, buildings and energy. For example, more than 200 businesses, representing $4.8 trillion in market value, have committed to set Science Based Targets that are scientifically consistent with efforts to limit warming to well below 2 degrees Celsius.

Lebanon’s strategic commitments

Lebanon has committed to a national strategy for cutting emissions by 15 percent in 2030 and by 30 percent if financial support from the available financing schemes within the agreement materialize; Prime Minister Tammam Salam signed the Paris agreement on behalf of the Lebanese Republic, while the Lebanese government has forwarded the draft law to the parliament; and the parliament will need to eventually ratify it. The decrease in number of rain days and the average precipitation per year that Lebanon has been witnessing will create severe water and agricultural challenges that will weaken our food and water security. To commit to its responsibilities, Lebanon will need to commit to mitigation measures in terms of reducing emissions through reforming its energy sector and increasing renewable energy sources, in addition to managing its waste, protecting its environment and enhancing its public transport. Those responsibilities are directly aligned with the country’s interest to improve its infrastructure, improve its environmental standards, and improve its public services, and ultimately support its economic growth. Financing will be available for those mitigation-related projects as well as for adaptation projects mainly related to the water and agriculture sectors. Cognizant of its vulnerability, Lebanon joined the Climate Vulnerable Forum in Marrakesh; this forum is an international partnership of countries which are highly vulnerable to a warming planet. The Forum serves as a South-South cooperation platform for participating governments to act together to deal with global climate change. The forum discusses a vision to reach 100% renewable energy in respective countries, with no commitment on timeline and only according to national circumstances; that doesn’t mean by any measure that Lebanon will be tied in exploring its potential oil and gas industry, like some misinformed analysts stated, but it will only provide support for Lebanon to benefit efficiently from financing and knowledge transfer over the years as it diversifies its energy sources.

Climate change is real and the years to come will present an unprecedented opportunity for small countries to benefit from financing mechanisms to improve their development aspirations, improve their adaptive capacity and reduce their vulnerability, and Lebanon should take advantage through continuous follow-up and strong intra-sectoral coordination by both the public and private sectors.

This article first appeared in the print edition of As Safir, November 29, 2016

December 5, 2016 0 comments

Entrepreneurship

Rafiqi: your new friend

by Jasmina Najjar November 29, 2016

written by Jasmina Najjar

Even the most social of us encounter times when our entourage of friends simply don’t want to go on a Sunday hike or can’t be coaxed into attending cultural events. Instead of missing out on all the activities you enjoy, you can turn to Rafiqi, an interactive mobile app available on Android and iOS that was just launched this September.

Co-founder Rawad Fakhry explains: “Rafiqi is a location-based mobile app that allows users to discover activities around them, or suggest their own, to find new people for their next outing, be it a football match, a dinner or any other activity.” The app’s co-founder, Ahmad Wehbi, adds: “The app covers different stages of the interaction from creation/discovery of activities, all the way through [to] individual/group chat where users can plan their next outing. We focus on turning online connections into real-life interactions.”

The idea was inspired by a friend of the co-founders, who liked unconventional hobbies such as playing the nay (a Persian musical instrument) at dawn, and had a hard time finding people who shared the same interests. They began noticing many others were like their friend. “Many love to go camping, play a ball game, learn dancing or watch a play, but give up on their plan because they can’t convince their friends to join,” says Wehbi. “Rafiqi seeks to connect these people with others interested in their same activity, thereby encouraging them to first do the things they love.” Or, as Fakhry puts it: “Fancy meditation at 5 am? Use Rafiqi and find your partner.”

The app is free to download and activities fall under specific categories: nightlife, sports, outdoor, hangout, culture and dining. You can input details about the activity and express interest in joining activities posted by others. User locations are displayed to show activities within the same vicinity. The concept and ease of use seem to be attracting substantial attention, with 2,700 downloads and 2,200 active users in just September alone.

“Our vision is to let anyone enjoy any activity from anywhere. Whether you’re a man or woman, young or old,” says Fakhry. Wehbi adds that the app is great for activity enthusiasts and “expats, tourists or others interested in discovering new activities and meeting new people around them”.

Rafiqi only exists in Lebanon at the moment, but the plan is to expand to other markets, starting with Dubai. The co-founders aim to stick “as close to users’ [needs] as possible” when updating the app. In fact, it has already changed significantly since its launch and Wehbi promises it “will keep evolving as we continue to grow and learn from our users”.

Wehbi stresses that user safety is important and a key driver for the design of the interaction model the app offers. Fakhry says: “Most apps developed today [include] trust and security issues cannot be 100 percent avoided. However to counter those concerns, Rafiqi users login only through Facebook (so you can check users’ profiles, pics and info) and we will later provide user ratings as an additional layer of security.” The app also encourages group activities in public settings, and a new feature will soon let users report suspicious activity or profiles.

The team behind Rafiqi have complementary skills. Ahmad Wehbi is an ex-consultant for McKinsey & Co. in Dubai, with a degree in entrepreneurship; Rawad Fakhry specializes in tech support and is also a business analyst; co-founders Wael Hourani, an Android developer, and Jad Feitrouni, an iOS developer.

Rafiqi was part of the Speed@BDD accelerator’s first batch of startups and received seed investment from it. An early stage startup, the current focus is to grow the active user base before seeking a second round of funding.

November 29, 2016 0 comments

Auto

A guide to automotive luxury

by Executive Staff November 28, 2016

written by Executive Staff

We’re approaching that time of year when, after having worked hard for the past eleven months, your mind starts to drift to what you will be rewarding yourself with come December. While several options come to mind – perhaps a mini vacation or some special timepiece – none have the same effect as a brand new shiny vehicle. That new car smell, those buttery soft leather seats, the glint of sunlight on chrome, are all hard not to think about as you contemplate a future gift to yourself. To help you make this important decision, Executive Life has rounded up 2017’s top car models; from panther-like SUVs to adventurous sports cars, we’ve got all the advice you need to make the perfect choice.

Aston Martin DB11

Nothing blends style and power better than an Aston Martin, and no car is more of an elaborate testimonial to this than the DB11, which merges both elements into a sophisticated work of art. Style-wise, the DB11 redefines the relationship between form and function with just a few design signatures, such as the front-hinging clamshell bonnet, the distinctive LED headlights and the accentuated lines of the Aston Martin grille. Its interior features wider door apertures, increased passenger space – especially head and legroom in the rear – fully integrated rear ISOFIX mounting points for a pair of child seats, plus a spacious luggage compartment, making the DB11 a family car with a stylish twist. Powered by a potent new in-house designed 5.2-liter twin-turbocharged V12 engine, the DB11 derives its power from being built on a lighter, stronger and more space-saving bonded aluminum structure. With the DB11, Aston Martin can once again claim its place as a leading brand in the luxury automotive market, and you can claim it for your own if you hurry to the dealership.

Audi R8 V10 Plus Coupe

Audi usually designs everyday cars, the cars you choose to elegantly transport yourself around town. Yet the Audi R8 definitely does not look like your everyday car; more like a powerful super car one would only drive at lightning speed with the engine roaring. With the R8, Audi has managed to design the everyday supercar: a vehicle you would be as comfortable racing as you would be driving to the grocery store. To begin with, the Audi R8, despite its sharp creases, carbon fiber accents and mid-engine layout, is not as flashy as your average supercar, hence the everyday appeal. This is not to say that it doesn’t have a cohesive design (characterized by piercing LED headlights and taillights, a lavish wheel design and an angular body) that makes it instantly recognizable as an Audi. The Audi R8 combines the subtlety and comfort of an Audi with the sheer power and swagger of a supercar, carving its way into the serious and young-at-heart.

BMW X1

The BMW X1 reminds us all that good things can come in small packages. Indeed, there is something charming and endearing about the X1 that no X5 or 6 can deliver. It has all the special features that are expected of BMWs, such as fast, responsive steering and a taut suspension, but on a smaller scale that will make you equally proud of stepping out of the car when you arrive to your dinner. The X1 sees BMW introduce front-wheel drive, freeing up more space in the car’s interior, along with other features such as positioning the engine in an east-west layout. As as result, the backseat gains comfort and legroom, while space in the trunk is also increased, making the BMW X1 a compact car that packs a lot of punch.

Jaguar F Pace

Jaguar drivers are traditionally the elites of the world. They are the ambassador and the prime minister, the “your highness” and the “your excellency.” The Jaguar F Pace is here to prove that these elites can also have a life beyond their official duties. These officials might be serious people, but seeing them leave their very demanding yet rather stodgy jobs in a dashing F Pace will make you think they might be heading skiing or scuba diving – it’s the car that shows off the wild streak under all that business attire. Whether you are young at heart or simply young, the Jaguar F Pace captures the evolution of a lifestyle from responsible and serious at work to curious and fun-seeking after hours.

Lexus RX

There’s a new Lexus RX on the block, and a quick look at its daring lines reveals it’s edgier and more focused than ever before. The RX represents the most adventurous Lexus crossover to date. With some noteworthy tech and performance upgrades, the RX 2017 is far more driver-centric than previous models, yet it still provides all the comfort, quiet and versatility that fans of this five-passenger luxury crossover expect. A slightly larger exterior than the previous RX gives this model more interior space, meaning more legroom and an airier feel. Despite its daring looks, the RX’s safety features are as sophisticated as ever, and include a blind spot monitor with rear cross-traffic alert, pre-collision braking with pedestrian detection and lane departure warning with steering assist. The Lexus RX is not only a car that makes you look good, it also has your back.

Maserati Levante

Some people enjoy wearing or driving peu porté, taking pleasure in the knowledge that they are among the select few to enjoy them. If you are one of those people, who don’t want to be mainstream but instead prefer to distinguish yourself through what you drive, then Maserati’s Levante is the car for you. Yet, for all its exclusivity and pedigree (it’s been producing cars for 102 years and counting), the Maserati doesn’t come with a peu porté price tag. This is not to say it’s a cheap car, but considering its sophisticated design, which reveals itself through the tiniest of details such as fine leather seats, wood and carbon fiber trimmings, and its seamless blending of the performance-oriented features of a sports car (50-50 percent weight distribution to name one) with the off-road capabilities of an SUV (electronically controlled Skyhook shock absorbers), you can rest assured you are getting great value for your big bucks.

Mercedes GLC Coupé

Lebanon has a long standing love affair with Mercedes, but when it comes to an affluent young person who’s about to choose their first car, Mercedes isn’t what typically comes to mind. Perhaps it’s too easily associated with their parents’ stately yet sedate model in the garage. It may be time for the statesman model to make way however, because the Mercedes GLC Coupé has arrived and it’s the car that every young person dreams of driving. With a standard-fit sports suspension and more direct sports steering, the GLC Coupé is among the sportiest of the Mercedes Benz SUVs, an element which certainly appeals to the young family man or woman. Design wise, the GLC Coupé also impresses. The harmony between the distinctive design worlds of coupé and SUV is highlighted by the side view of the 1.60 meter-high SUV with its characteristic, stretched roofline of a sports coupé. Visually and functionally, the GLC Coupe may not be your parents’ car, but it might just be the car for you – the dynamic young parent.

MINI Clubman

The MINI Cooper is a very personal car, a compact vehicle that you drive around town, rarely taking anyone along for the ride. It is a car you treat yourself with when you are single. But what happens when you start a family, yet still want to enjoy the experience of driving a compact and trendy MINI? You opt for the Clubman. The Clubman is the less selfish version of the MINI. The latest Clubman is 28 centimeters longer than the four-door Cooper hardtop and seven centimeters wider, and, believe us, every one of those extra centimeters matter. There is now room for four to five adults to sit comfortably in the Clubman and to store their luggage as well (in the cargo hold that is double the capacity of the hardtop). While retaining the compact and modern look of the MINI Cooper, the MINI Clubman is a super MINI, a versatile car that the whole family can appreciate, just as they appreciate the super mom or dad driving it.

Range Rover Evoque Convertible

Not only is it fresh, young, dynamic and sporty, but it’s also a Range Rover and a convertible! The Range Rover Evoque Convertible combines the bold design and elegance of the typical Evoque, with inclusive specifications and a folding roof to create a convertible that takes care of business in all seasons. The Evoque Convertible is a joy to look at. Its funky exterior design is highlighted by a special one-of-a-kind fabric roof shaped to create a crisply defined silhouette that remains faithful to the original design. Its Z-fold mechanism lays flush with the rear bodywork for a sleek, uncluttered appearance when lowered. As the first ever Range Rover convertible, the Evoque Convertible enjoys all the traditional luxury of the Range Rover, along with a distinctive four seat design and versatile storage, giving you enough room to pack all your beach gear. So if you don’t want to give up all the off-road advantages of an SUV, but still want to feel the night air blowing through your hair while you cruise Lebanon’s highways, then look no further than the Range Rover Evoque Convertible.

Volvo XC90 Excellence

The Volvo XC90 Excellence is most aptly described as a silent star. Long known as the safest car manufacturer in the world, Volvo has lately significantly invested in design, evolving their image into a trendier, more luxurious brand that would appeal to a younger generation. The XC90 Excellence is the fruit of that labor. The XC90’s design is fresh and dynamic, with features such as super comfortable, individually adjustable rear seats and a Bowers & Wilkins sound system, yet it still maintains Volvo’s impeccable reputation for solidness and safety. These factors make it the obvious choice for young families. The promise of safety and reliability, which all parents look for in the vehicle that will be transporting their children, is there, yet the edginess and features of the new design make it as sexy as the parent driving their children to school. It is an attractive ride that makes heads turn, while making sure yours is safe.

November 28, 2016 0 comments

Entrepreneurship Wine and spirits

209 Lebanese Wine raises the glass

by Jasmina Najjar November 15, 2016

written by Jasmina Najjar

Unwinding at the end of the day with a glass of Chardonnay or enjoying a meal with the perfect Merlot is one of life’s delights. Lebanon is blessed with a vast choice of wines produced by both well-known brands and exquisite boutique wineries. There are many grape varieties and distinct tasting notes worth discovering.

And yet a trip to the supermarket or even to a wine store will present you with only a small selection of local wines. A mere sip that pales in comparison to what’s actually available out there. Selecting the ideal Lebanese wine for your meal, event or night in can also be a challenge without professional advice.

Launched in October 2016, the 209 Lebanese Wine website gives wine lovers the chance to explore the sensational local wines available in Lebanon.

This is not so much a website but more of an indulgent experience dedicated exclusively to Lebanese wine. The platform, which boasts approximately 35 wine brands and 250 wine-related products, acts as the first Lebanese wine club, suggesting useful pairings and tasting notes for each selection, as well as hosting an insightful wine blog. Best of all, your wine selection will be delivered straight to your door. As Selim Yasmine, founder and managing director, explains: “We want to make Lebanese wine available on every table in Lebanon and abroad, through an omnichannel, unique wine experience.”

Summarizing what the platform offers in a bottle, Selim Yasmine highlights “choice, the only place where consumers can find the widest selection of Lebanese wines; reliability, guaranteed freshness and storage conditions; convenience, delivered straight to you by wine-conscious professionals, hassle-free; guidance, a powerful search engine and filtering criteria allowing visitors to find the ultimate selection that suits their food menu, grape selection, taste and budget; personalization, a unique CRM [Customer Relationship Manager] that will recommend wines based on purchase history, as well as special occasions and gift service; rewards, a fidelity program will be developed at a later stage and will offer special incentives to loyal customers; and exclusive promotions”.

Yasmine is more than a passionate wine lover; he holds the Wine and Spirits Education Trust certification with merit. He’s also a marketing professional with proven insight into various industries. His success in wine is notable, having contributed to the success of Chateau St. Thomas and Domaine Wardy in the local market, where he worked as brand manager of wines and spirits. He also has a hand in Vintage Wine Cellar’s initial success when it opened. Now he is pouring all his expertise into this start-up.

Key advisors are helping him provide this refreshing wine experience for users. These include: Elias Ghanem, a resident mentor at the UK Lebanon Tech Hub accelerator and the chairman and co-founder of Telr (online and mobile payment gateway and cash management services); financial expert Paul Eid; Tatiana Nehme, a specialized transaction and wine lawyer from Nehme & Associates; and his own wife Katia Yasmine, the Managing Director of TRACCS Lebanon PR agency.

It’s too early to share figures on deliveries but Selim Yasmine says you can buy your wine at regular retail price and, for now, standard delivery (48 hours) is completely free, while same day express delivery costs $5.

Available only in Lebanon for the time being, the startup plans to launch a wine truck in 2017 and global expansion will kick off in January 2018 with a focus on Europe, Latin America (especially Brazil) and North America. 209 Lebanese Wine is funded by its co-founders’ investments and a Kafalat loan, and is already registered as an sal.

November 15, 2016 0 comments

Test Drives

Let’s go to Mexico

by Yasser Akkaoui November 9, 2016

written by Yasser Akkaoui

The Camaro 2SS Coupe is the car that movie stars drove in the late 1960s, the period when I was born and when Chevrolet brought the world the iconic Camaro. It’s the car that made John Cusack cool in the 1980s classic Better off Dead, and the car that Ron Howard and his girlfriend stole for a wild ride in Eat My Dust.

It’s no surprise that stepping into a Camaro has major significance for people who have grown up dreaming and fantasizing about it.

Therefore, I had a big responsibility. I am not talking about careful driving, which goes without saying and is almost guaranteed considering the traffic on Beirut’s streets – they are certainly no Route 66 or a runaway highway to Mexico (for some reason all the cool Camaro-driving villains had Mexico as their escape route) – but also the responsibility of living up to the coolness and swagger of the American movie stars who drove the Camaro.

The car definitely has an inspiring aura, it is a beast that commands respect. With a 6.2 liter V8 and 455 horsepower, the Camaro 2SS Coupe is literally the muscle car of your dreams.

Although fifty years have passed since the Camaro made its first appearance, it has preserved its aggressive yet elegant lines. By aggressive, I mean that just by glancing at it you sense the beast within, yet its lines are still elegant enough that your girlfriend would be comfortable sitting beside you in her Herve Leger dress and Jimmy Choo shoes while you cruise down the streets of Monaco.

When you are behind the wheel – and especially when you are not the car’s owner but have it on loan for the purpose of the review – you don’t allow yourself to treat the Camaro roughly (not that my driving can ever harm the powerful engine and transition) but, while cruising around the city, you definitely see heads turn. This is not because the car is yellow nor is it because of its beautiful lines or the roar of its powerful engine, it is because they are expecting you to do something heroic.

For the younger generation, they are expecting it to transform into a golden robot a la Transformers and for the slightly older crowd, they are expecting Clint Eastwood’s 44 Magnum revolver to pop out the window. To be honest, you are tempted to do so; this is something you only understand when you gently tap the pedal and realize that the 1960s are alive and kicking.

The car has excellent handling, but when driving it on the double S mode the car devours the asphalt. While I was hoping none of my son’s friends (who are in their early 20s now) would see me driving around in a yellow Camaro, I ended up bumping into them and our relationship will never be the same: we have one more thing in common now – the admiration of the Camaro.

Now that this bond with the Camaro has travelled through time from the late 1960s to 2016, I would gladly ride off into the Mexican sunset with a bag full of cash (or just into my garage).

November 9, 2016 0 comments

Test Drives

A first time exclusive

by Yasser Akkaoui November 9, 2016

written by Yasser Akkaoui

When I first spoke to Lara Faddoul, the marketing manager at Porsche Lebanon, we agreed that I would test drive the Carrera 4S. Then, to my surprise, she called me a few hours before the scheduled drive to inform me that the Porsche 911 Targa 4S had just landed on Lebanese soil: not a soul in Lebanon had driven it yet and Executive and I would be the first. I knew I was in for a treat.

To begin with, there is the sheer beauty of the car. It’s so beautiful and timelessly elegant, with a tamed masculinity that shines through. This is especially true for the color of the car I was driving: a sleek metallic night blue perfectly offset with the bright off-white leather interior.

Its appearance inspires you to drive it elegantly, there is simply no other way. The soft purr of the engine and the way it handles truly differentiates it from any other car. Little do passersby and observers know that behind all this elegance, seriousness and pedigree of the 911, it is really just a marvelous toy.

It’s agile, fun and safe. It can go from 0 to 100 in 4.2 seconds, and you can switch modes of driving from Sport to Super Sport and listen to the noise of the engine change into a throaty hum with a simple move. It has little gadgets and cool accessories that only the driver can appreciate, making them your little secrets. Just keep a smirk on your face and enjoy the ride.

The most beautiful part of the drive comes when you let the roof down. This is by itself something to admire: the roof smoothly and elegantly uncovers in a clockwork-like mechanism that the best Swiss watchmakers would envy.

Once the roof is down, the fun starts. The new design brings back the identity and authenticity of the original Targa through the separation bar at the rear windshield, which is kept intact when the roof is down.

Driving back from Byblos with the wind blowing through Charlize’s dazzling long hair and the clear and beautiful sound from the blaring sound system inspiring her to sing her heart out, you can’t help but push the pedal to the metal. This is when you realize that, despite your excitement, you have to be careful because you don’t want Assaad Raphael (owner of Porsche Center Lebanon) to have to pay your speeding fines; with the tiniest of taps on the gas pedal, you can go from 80 to 150 in a few seconds without even feeling it. The car is sturdy and steady enough that you feel safe speeding or taking the sharpest corners, knowing that it will always respond to your precise maneuvers and maintain its balance.

The one thing that would have made the experience more thrilling would have been to let Charlize drive and sing while I enjoyed the view.

You can contact Assaad or Lara to share my excitement, but as for Charlize, don’t even dare!

November 9, 2016 0 comments

Entrepreneurship

Eddress is the new address

by Jasmina Najjar November 8, 2016

written by Jasmina Najjar

In a world where more than 100 countries don’t have proper postal systems and four billion people lack clear home addresses, giving directions for a simple lunch delivery can be a nightmare.

We know this all too well in Lebanon. It’s not uncommon to get creative, telling people to turn left at Abou Rami’s mini-market before turning right at a white office block and then looking for a building with a red gate and potted plants.

Luckily, eddress simplifies your physical address by turning it into a six character code made up of three letters and three numbers. You can have multiple eddresses (work, home, etc.), and when you move, the same code can be updated to reflect the new location.

Ronny Shibley, co-founder and CEO, says that he first had the idea for eddress a year and a half ago while ordering food through a restaurant’s app. “While I was filling out my address the app crashed,” he says. “I didn’t want to go through the laborious process of typing in all the details again and so I called them to give them directions. Then it struck me, ‘why can’t I just have a six character code?’” He later expanded his idea to work for businesses as well as users.

The app’s user platform went live seven months ago, while its businesses specific platform launched just three months ago. Combined, both applications already have around 10,000 users, and 70,000 eddresses have been created so far. It includes a personal and business address directory, the option of putting contacts on the map, privacy controls (you choose who can see your eddress), and third party integration with the apps Zomato and Uber. Starting in November, users will also be able to place orders through eddress.

Eddress is free for users and requires them to register and pin addresses onto the map. Once a business that uses eddress makes a successful delivery, the address is verified. Shibley envisions “a global verified address system that is accessible on the cloud by users and businesses”.

In reality, eddress offers more than just a verified address: it connects you to the community through its Hyperlocal Services, making it your convenient link to food and beverage options, groceries, ATMs, banks, dry cleaners, the Red Cross, plumbers, electricians and other services in your neighborhood.

The app is already being used by several businesses to streamline deliveries, including local and international brands such as Burger King, Ginger & Co., Le Cid, Grab n’Go, The Malt Gallery, Flowers, delivery and transactions app Wakilni, EasyBites in Abu Dhabi, and BoxBike in Bolivia.

Businesses using the app can transform clients’ delivery addresses into easy-to-find eddresses, as well as assess delivery times, track drivers, optimize routes, engage customers and receive direct feedback online.

After a free trial period, businesses select one of three subscription packages, which start at $59 per month. There’s no limit to the number of users a business can have on their distribution platform, plus certain eddress features are free for businesses that choose to be listed on the app’s marketplace.

Before eddress, Shibley, a computer engineer, worked on several startups, including Codefish, which launched six years ago and offers IT consulting and software development. Eddress is incubated at Codefish with a dedicated team. Co-founders Karim El Khoury (COO) and Emile Harb bring their finance expertise to the table, while Kamel Semakieh works as a computer engineer for the app. Sixteen months ago it had an angel round raising $220,000, and it recently secured another $700,000. Pre-series A, the startup is already generating revenue. While eddress is still being optimized, there are plans to expand further to more countries around the world.

November 8, 2016 0 comments