‘Cabinet approves $266m in soft loans extended by French agency’

AMMAN — Cabinet on Sunday endorsed $266 million in soft loans, extended by the French Development Agency (AFD) and described as critical to the Kingdom’s infrastructure.

The three loans will support Jordan in diversifying its energy mix, support water infrastructure and the general budget tied to additional water projects, a Planning Ministry statement said.

Planning and International Cooperation Minister Imad Fakhoury said the loans are part of Jordan’s efforts led by His Majesty King Abdullah to increase grants and international soft loans coming to Jordan in spite of its classification as an upper-middle-income economy by the World Bank.

The French loans were coordinated by the planning and the finance ministries, the official said.

The first soft loan, of $54.9 million, will be used to finance the green corridor project, which will allow the National Electric Power Company to connect renewable energy projects, mainly wind and solar, to the national electricity grid. 

“This will reduce electricity generation costs and diversify Jordan’s energy mix as per the National Energy Efficiency Strategy and Jordan 2025,” Fakhoury said.

The national strategy seeks to diversify energy sources, setting a 10 per cent renewable energy contribution to the total energy mix by 2020. The government announced signing 13 agreements to build several wind and solar power plants in June.

The second soft loan, $43 million, will be allocated to the Wadi Al Arab Water Conveyance project, which will contribute to the provision of 30 million cubic metres of water annually to the Wadi Al Arab Dam.

The project will help solve water problems in the northern region, exacerbated by the large number of Syrian refugees living in the area. Jordan currently hosts over 1.4 Syrians, with only some 100,000 living in official refugee camps.

The third loan will support the state budget, and is earmarked for projects to improve the water sector in accordance with the economic blueprint “Jordan 2025”, at $168.1 million.

The third soft loan is extended for 17 years with a 4-year grace period.