EBRD’s first green financing facility to be launched in Jordan

AMMAN — The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) in Jordan are promoting green investments in the private sector by introducing the first internationally supported comprehensive green economy programme in the country.

The programme will support Jordan’s transition to a green economy as the country adapts to an increase in demand for water and energy following a substantial growth in population, according to an EBRD statement.

The government of Jordan launched a National Green Growth Plan (NGGP) in 2016, identifying the most urgent projects in water, sustainable land management, energy efficiency, resource efficiency and renewable energy.

During a virtual webinar the EBRD presented its support programme, which is expected to be launched in Jordan in 2021. 

The EBRD plans to roll out its Green Economy Financing Facility (GEFF) and the related Green Value Chain (GVC) Facility for small- and medium-sized enterprises (SMEs). 

The programme combines commercial loans from the EBRD, concessional loans from the Green Climate Fund (GCF) and grant funding by the EU.

GEFF supports businesses and homeowners with investments in green technologies to preserve natural resources, increase energy efficiency and reduce emissions through the introduction of state-of-the-art technologies and solutions, the statement said.

The programme offers loans through local banks and microfinance institutions for on-lending to local corporates and SMEs. 

The programme also provides free advisory services. To date, GEFF has established a network of more than 140 local financial institutions across 26 countries supported by more than 4 billion euros of EBRD finance.

GVC provides finance and advice for private sector SMEs to support their competitiveness and growth by strengthening product quality and adding value, improving standards and creating an enabling environment for exports, according to the statement.

The European Union’s support for green growth in Jordan will be in line with the EU Green Deal, Europe’s main policy direction towards sustainable economic development, and climate action in Europe and the world, the statement said. 

The EU Green Deal focuses on the use of green and affordable energy applications aligned with a NEXUS model on energy-water-food synergies, combined with sustainable agriculture practices, and nature conservation and rehabilitation.

The virtual event was joined Nabil Masarweh, minister of environment of Jordan; Maria Hadjitheodosiou, the EU ambassador to Jordan; Philip ter Woort, EBRD director for the eastern Mediterranean region; Iyad Abu Haltam, board member of the Amman Chamber of Industry; and Maher Al Mahrouq, director general of the Association of Banks in Jordan.

Mr ter Woort said: “The EBRD is strategically committed to promote greener investments in Jordan to benefit its private sector which also contributes to sustainable economic growth. We hope that the Jordanian financial sector will benefit from the EBRD’s successful GEFF programme as has been the case in many other economies where the bank has rolled out the programme.”

Hadjitheodosiou said: “With the launch of the EU Green Deal, the EU is placing its focus on green energy and the sustainable use of resources, promoting green growth and economy development within a circular economy approach, both at home, as well as in its support to its partners. We are keen to start the first green growth support programme in Jordan in 2021 and translate the EU Green Deal into action, in order to deliver on green growth, green jobs and new opportunities”.

The EBRD aims to build green, low carbon and resilient economies through its Green Economy Transition approach with the goal of becoming a majority green bank by 2025 and helping reach net annual greenhouse gas emission reductions of at least 25 million tonnes over the next five years, the statement said.

Since the start of its operations in Jordan in 2012, the EBRD has provided more than 1.4 billion euros in financing for 54 projects, according to the statement.