Jordan secures WB soft loan to optimise water, energy management

AMMAN — Jordan on Sunday signed a $250 million soft loan with the World Bank to enhance reforms in the energy and water sectors.

The loan's payback period is 35 years with an interest rate of around 1.25 per cent and a five-year grace period, Minister of Planning and International Cooperation Imad Fakhoury said at the signing ceremony Sunday.

The minister said the Second Programmatic Energy and Water Sector Reforms Development Policy Loan will be provided on concessional terms through an International Bank of Reconstruction and Development (IBRD) loan of $225 million and support from the Concessional Financing Facility (CFF) in the amount of $25 million.

The loan aims at improving the financial viability of the electricity and water sectors and increasing efficiency gains in the energy and water management, which are “part and parcel of our new vision, Jordan 2025 of achieving self-reliance and financial stability,” Fakhoury added.

The loan will be transferred to the Treasury before the end of the year, he said.

It will support Jordan’s efforts in ensuing better management and efficiency in the water and energy sectors, especially since around 16 per cent of the electricity consumption in Jordan is drawn by the water sector, he added.

The loan will support Jordan’s efforts to maximise benefits of water resources and reduce the energy bill in the water sector. It will help reduce groundwater depletion caused by over-pumping of underground water resources. 

“The increase of energy efficiency and the increased adoption of renewable energy in the sector will help us achieve our goals in this regard,” said Fakhoury.

“I would like to thank the [World] Bank again for establishing the CFF which came in response to our request in the spring of 2015 for the Bank’s support in advocating for a paradigm shift, a new way for the international community to engage with vulnerable middle-income countries affected by the Syrian refugee influx. The CFF is also very much in line with the outcomes of the London [donor] conference,” the minister said.

Jordan has been advancing on political, social and economic transformation, serving as a model for successful reforms and well-managed change in a region that has been experiencing great turmoil, particularly in recent years, according to Fakhoury.  

“We remain strongly committed to moving steadfastly on this front, and in offering a model for others in the region and elsewhere by providing a successful roadmap for stability and effective reforms,” he added.

“The signing of the DPL-II agreement is timely for Jordan. We look forward to the quick disbursement of this loan over the coming days to the Treasury account, where this will assist us in meeting some of our financing needs for 2016.” 

Ferid Belhaj, Director of the World Bank’s Middle East Department underlined the WB’s “relentless support to Jordan”.

He said the WB is committed to sponsoring Jordan as it moves ahead with reforms.