Energy Transition and the Private Education Sector in Lebanon

Since the end of 2019, Lebanon has been experiencing the worst economical crisis in its history with the World Bank classifying it as one of the three worst crises since the middle of the 19th century. This crisis acts on multiple aspects; including financial, economic, health and social which were made worse by the Beirut Port blast on August 4, 2020. This has led to the deterioration of the various macroeconomic indicators which strongly reflect the daily reality of the Lebanese population. Indeed, according to the World Bank data, the country’s GDP has seen a decrease of 62% between 2018 and 2021 cause by a devaluation of the Lebanese currency of around 95%. According to data provided by the United Nations, this has been accompanied by a hyperinflation reaching ~280% (between 2019 and 2022) exacerbated by the eruption of the war in Ukraine, which, coupled with the subsidies lift, led to an increase of the price of fuel of almost 1500%, in addition to a severe shortage of wheat and other vital commodities. Indeed, 20L of fuel, which used to cost less than 44,000 LBP in early 2021, reached by June 2022 over 680,000 LBP.

Given the violent consequences of the crisis, the Lebanese youth have been strongly affected with almost half of young people finding themselves unemployed. ESCWA data reports a remarkable impoverishment of the population with nearly 82% of the Lebanese people living in a context of multidimensional poverty. The downgrading is violent and rapid. To date, the authorities have not drawn up a serious economic recovery plan, which suggests that the situation will deteriorate further in the coming period.

In this difficult context, the education sector has been severely affected. This sector, which had previously been the leader in the region, very quickly saw itself undergoing a significant stress test. Indeed, for the start of the academic year of 2022, 55,000 students migrated from private schools to public schools. In addition, 40% of young people have reduced their spending on studies, and even a de-schooling movement is underway. This is also consistent at the social level with an increase in criminality including theft, delinquency, and others.

Historically, the share of school expenditure on salaries has always been higher than that of operating expenditure (65%/35% distribution). But with the unprecedented devaluation of the Lebanese pound, this distribution is now reversed. This is because operating costs are mainly indexed to the dollar, which considerably increases their share of total costs.

That said, due to the dollarization of the economy, the most important element of operating costs is energy, representing 10% to 15% of the school budget on average (compared to less than 2% before the crisis). As mentioned above, hyperinflation, accompanied by the eruption of the Russian-Ukrainian conflict, led to skyrocketing fuel prices, which were historically subsidized by the Central Bank of Lebanon.

Faced with this situation, educational establishments are urged to find lasting solutions to ensure the sustainability of their institutions. One of the most promising solutions is the reduction of energy costs using renewable energies as part of an energy transition plan.

According to the definition offered by the French government, energy transition is a plan to modify energy production and consumption and consists of a series of actions to be taken to achieve sustainability objectives. These include a reduction in energy consumption through a cutback in the use of fossil fuels (transport, thermal comfort, industrial activity, etc.) and the establishment of a mode of production based on local resources and renewable energies as well as a decrease in the production of waste.

In the context of schools, the installation of photovoltaic panels, could reduce the annual fuel consumption of schools by up to 80%. This will considerably reduce the deficit of schools, and reinforce their economic model, protecting the education of thousands of students.

Thus, if effective energy transition measures are put in place, schools will be able to reallocate their expenses more effectively and in various ways, such as: an increase in teachers’ salaries knowing that they are receiving today, on average, the equivalent of ~$350/teacher/month, more than ten times less than the average for teachers in countries belonging to the Organization for Economic Cooperation and Development (OECD), improving the technological infrastructure (laptop, educational software, physical network etc.) of the schools which is in dire need of revamping, and the improvement of the educational offer which has long been recognized as being one of the best in the region but has recently been falling short of expectations.

The energy transition of schools would thus begin with energy sobriety plans and would continue with the implementation of a renewable energy source, solar being the most optimal alternative in the Lebanese context. Beyond the good ecological conscience that this transition would induce, it becomes a necessity for the sustainability of the economic model of the schools.

By the Euromena Consulting Education Practice

We make it happen.