Jordan, AFESD launch strategic partnership to fund development projects

AMMAN — The Cabinet, during a session chaired by Prime Minister Jafar Hassan, approved on Wednesday the launch of a strategic partnership with the Arab Fund for Economic and Social Development (AFESD), introducing a framework for financing a range of priority development projects aligned with Jordan’s Economic Modernisation Vision.

The initiative, which covers the period 2025–2029, marks a new phase of cooperation between the two sides and, for the first time, allows for the financing of private sector initiatives. 

Jordan will be the first country to adopt this model, with similar agreements expected in other Arab states, according to a Prime Ministry statement.

The initiative will focus on key sectors including water, social services, private sector growth, value-added industries, public-private partnerships, digital transformation, export development and start-up support.

Under the agreement, each project will require Cabinet approval prior to implementation.

Jordan’s partnership with the AFESD spans over five decades, during which the fund has supported major projects in sectors such as energy, agriculture, transportation, industry, water, mining and social development, the statement said. 

AFESD is planning to allocate around $750 million to support development projects in the Kingdom over the next year, to be administered in cooperation with regional and international partners, including the World Bank and the European Investment Bank.

In remarks to the Jordan News Agency, Petra, Senior Advisor to the AFESD director-general Mirza Hassan said that the fund has shifted its developmental financing and operational restructuring policies, with Jordan selected as the “initial incubator” of the new vision “in culmination of the exceptional partnership that exceeded $3 billion in investments.”

“This strategy, developed over a year by a consortium of Arab and Jordanian experts, aims to convert pressing regional development challenges into sustainable investment opportunities, with a targeted emphasis on critical sectors like water, energy, and digital transformation,” he said. 

The advisor explained that Jordan was chosen as the optimal starting point for this strategy, “given its clear economic vision and its proactive engagement with recent economic, political, and administrative reforms.

"Jordan is one of AFESD's largest development partners, with over $3 billion in investments, reflecting our strong confidence in its economy," he said. 

He added that the fund’s key focus in Jordan will be on the National Water Carrier project. “The fund will also prioritise sustainable energy projects, including solar and wind power, to meet Jordan's growing energy demands.”

Investments in education and healthcare infrastructure, including school construction and hospital development, are also planned, he said, emphasising the critical role of public-private partnerships in these sectors.

In a related decision, the Cabinet also approved a memorandum of understanding with the AFESD to help finance the activities of the Jordanian Hashemite Fund for Human Development (JOHUD). The funds will also support social and economic development programmes aimed at enhancing skills and addressing local community needs.

The Cabinet also extended its framework agreement with Fortescue Future Industries for a green hydrogen and ammonia production project in the Aqaba Special Economic Zone. 

The extension, valid until March 31, 2026, is intended to help developers meet investment requirements, facilitate infrastructure financing, and standardise investment contracts. It also aims to clarify incentives and expected returns for future investors in the green hydrogen sector.

The Council of Ministers also approved the settlement of 979 outstanding tax cases between taxpayers and the Income and Sales Tax Department. The decision is part of ongoing efforts to ease financial pressures on businesses, enhance tax compliance, and stimulate economic growth and expansion.