Facing a deepening economic crisis and ongoing political instability, Lebanon is receiving increased support from Egypt, with a recent surge in high-level diplomatic and economic engagement. the two nations signed 15 agreements last month focused on reconstruction and key sectors like energy, signaling Cairo’s commitment to bolstering Lebanon’s infrastructure and stability.This expanded cooperation-building on over $1 billion in trade in 2024-comes as Lebanon seeks to address its chronic electricity shortages and unlock potential offshore gas reserves following a maritime border agreement with Cyprus.
Egypt is expanding its engagement with Lebanon beyond efforts to prevent regional escalation, with a growing focus on economic cooperation, particularly in the energy sector.
Recent high-level visits from Cairo signal a broadening of ties, as Lebanon continues to grapple with a severe economic crisis and political instability. Egyptian Prime Minister Mostafa Madbouly traveled to Beirut last week, following a November 26 visit by Egyptian Foreign Minister Sameh Shoukry. Egyptian intelligence chief Abbas Kamel also met with Lebanese officials in late October.
During meetings with Lebanese President Joseph Aoun, Parliament Speaker Nabih Berri, and Prime Minister Najib Mikati, Madbouly emphasized Lebanon’s challenges while highlighting opportunities for reconstruction. He pointed to Egypt’s own economic reform program as a potential model for Lebanon’s recovery.
Trade between Egypt and Lebanon has increased in recent years, exceeding $1 billion in 2024, according to Madbouly. However, both countries believe there is significant potential for further economic integration and are working to remove obstacles to increased trade.
The increased cooperation follows a visit to Cairo by the Lebanese Prime Minister last month, where 15 agreements were signed covering areas such as trade, investment, food security, electricity, renewable energy, industry, oil and gas, and reconstruction.
The energy sector, particularly electricity, is a key area of focus for collaboration. Egypt is offering support for both traditional power projects and the development of new and renewable energy sources, leveraging its experience in energy production, grid management, and clean energy projects. This cooperation is seen as crucial for improving Lebanon’s infrastructure and bolstering its economic stability.
“Energy Cooperation”
Cairo is keen to collaborate with Beirut in the vital energy sector, supporting both conventional electricity projects and expanding into new and renewable energy sources. Egypt’s expertise in energy production, network management, and clean energy project implementation is central to this effort. This collaboration is viewed as a cornerstone for improving Lebanon’s infrastructure, promoting economic stability, and reducing production costs for industrial and service sectors.
Reconstruction, especially in southern Lebanon, is also a priority, with urgent needs for infrastructure projects related to electricity, water, roads, and communications. Egyptian companies are eager to play a role in these reconstruction efforts.
Lebanese economist Pierre Khoury told “Al Hurra” that opportunities to strengthen partnerships between the two countries remain extensive, due to the relative complementarity of the Egyptian economy – based on economies of scale and production capacity – and the Lebanese economy, which is based on services, human resources, and sector expertise.
Khoury added that the mechanisms for joint agreements in the gas and electricity sectors are based on bilateral or trilateral models through direct government channels or through national companies, with international technical and financial oversight, and are based on long-term supply or transit contracts. He believes this approach enhances Egypt’s role as a regional energy hub and provides Lebanon with a relatively stable source that eases pressure on public finances and restores economic order.
Challenges and Future Opportunities
Lebanon has been struggling with a chronic electricity crisis for years, exacerbated by economic contraction and declining production capacity. The country’s electricity networks and high-voltage lines are also aging and require maintenance, complicating efforts to import electricity from Egypt or other regional countries.
Observers say these factors highlight the importance of partnerships Lebanon can forge with regional companies to leverage their expertise and resources to resolve the crisis.
Egyptian economist Mohamed Anis told “Al Hurra” that Madbouly’s visit underscores the importance of Lebanon’s energy file, while also “carrying a political dimension.”
He explained that this move is part of Egypt’s direct support for the sector, adding that Egypt’s focus is on helping Lebanon restore its health in the energy sector, rather than seeking profit. He acknowledged, however, that Egyptian support, however significant, remains limited compared to the scale of the Lebanese crisis.
Lebanese economist Basem Al-Bawab told “Al Hurra” that economic cooperation between Egypt and Lebanon is a pressing necessity, with the energy and gas sectors being among the most important areas of partnership, given the genuine desire for a strategic partnership. He noted that Lebanon possesses promising oil and gas resources that could form the basis for a petroleum partnership with Egypt. Al-Bawab also emphasized that regional changes, including the situation in Syria, could open up new avenues for economic partnerships that serve the interests of both countries.
Lebanon and Cyprus signed an agreement last month to demarcate their maritime borders, a move Beirut hopes will open the door to exploration for offshore gas fields and enhanced cooperation in the energy sector in the Eastern Mediterranean.
Anis said the border demarcation agreements allow Egypt to enter into partnerships within the limits of its capabilities, as well as provide technical support and assistance to serve Lebanon’s interests and contribute to the development of its energy sector.
Economist Pierre Khoury stressed that reforming Lebanon’s electricity sector, one of the largest sources of financial drain, is a necessity that cannot be postponed. He concluded that economic cooperation between Egypt and Lebanon, particularly in the energy sector, cannot be separated from an internal reform process that redefines the role of the Lebanese state from a failing financier to an effective regulator.
Until that happens, opportunities for energy cooperation between Egypt and Lebanon remain significant, but maximizing their benefits through productive projects requires continued follow-up and effort, supported by improved security and political conditions in Lebanon and the region.
