(Bloomberg) -- Turkey's Karpowership has switched off two floating plants moored off Lebanon that supply about a fifth of its electricity needs.
The company is locked in a dispute with Lebanon after the country's financial prosecutor asked for the power barges to be seized pending an investigation into alleged corruption in the renewal of electricity supply contracts that have been in place since 2013. The Istanbul-based firm has denied any violation of its contract or the law.
“For 18 months, we have been exceedingly flexible with the state, continually supplying power without payment or a payment plan, because the country was already facing very hard times,” Karpowership said in the statement. “However, no company can operate in an environment with such direct and undue risk.”
Karpowership was owed about $100 million by Beirut last July, according to the Lebanese energy minister.
Lebanon has suffered from severe power rationing for decades as political bickering stalled plans to overhaul the electricity sector, but outages have worsened during the current financial crisis. The central bank has maintained its subsidies for essential goods, including fuel, after the currency plunged on the black market and lost almost 90% of its value.
Lebanon to Reduce Subsidies as Cash Runs Out, Finance Chief Says
Hours after the shutdown, Electricite du Liban, the state-run power company, said it had increased output from some of its plants by 130 megawatts to partly compensate for the 230 megawatts supplied by the Turkish barges.
Parliament had approved the allocation of $200 million to help the utility purchase fuel oil for power generation. The decision was later challenged by some parliamentarians opposed to draining what's left of the central bank's dollar reserves.
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