Saudi fund reschedules Jordan debt over 20 years

AMMAN — The government on Sunday signed an agreement with the Saudi Fund for Development (SFD) under which the latter would reschedule 19 loan repayments worth $114 million owed by the government over a period of 20 years, in addition to a 5-year grace period.

The agreement, signed by Minister of Finance Ezzeddine Kanakrieh and Vice President and Managing Director of the SFD Khalid Bin Sulaiman Al Khudairi, aims at easing the country’s debt burden, as Saudi Arabia seeks to help Jordan overcome its economic crisis, a Planning Ministry statement said.

The signing ceremony was attended by Saudi Ambassador to Jordan Prince Khalid Bin Faisal Bin Turki Al Saud, Minister of Planning and International Cooperation Mary Kawar and Governor of the Central Bank of Jordan (CBJ) Ziad Fariz.

The Jordanian and Saudi sides also signed an agreement to enable the government to directly spend on projects financed by a Saudi $1.25-billion grant with a ceiling of $20 million, and when the withdrawals reach $15 million, the account would be re-fed.

The Saudi grant is part of an Arab Gulf states’ $5-billion grant pledged in 2011 to support development projects in Jordan over five years, provided by Saudi Arabia, the UAE, Kuwait and Qatar, on a share basis of $1.25 billion for each country.

The second agreement aims to provide cash flow and ensure the implementation of projects as planned without delay.

Under the new mechanism, the SFD would transfer the balance of the remaining part of Saudi Arabia’s grant to the Treasury account of the CBJ.

The agreement was signed by Minister of Planning and International Cooperation Mary Kawar, Kanakrieh, Fariz and Khudairi, according to the statement.

The Saudi ambassador reiterated Saudi Arabia’s support for Jordan and its economy, pointing out that Saudi Arabia will aloways honour its commitments and it will continue to support the Kingdom, a strategic partner for Arab Gulf countries.

The SFD contributed to financing 20 economic and social projects in Jordan with a value of some $488.1 million in the period 1975-2017, with financed projects varying from infrastructure projects to others in the health, education, water and energy sectors.

Under the Mecca Summit pledges, Saudi Arabia, Kuwait and the UAE agreed to provide a $2.5 billion economic aid package to Jordan over five years to support the budget, fund development projects, provide credit guarantees to enable Jordan to secure international financing and place deposits in the CBJ.

At the end of their summit, the Arab Gulf states said that the assistance, which will come in four forms, is driven by “the fraternal ties between the four states, Islamic and Arab principles and values”. 

In October, the government signed agreements with three countries to implement the pledges, which are: $1.16 billion in deposits at the CBJ, $550 million in soft financing for development projects, $200 million in credit guarantees to the World Bank to help Jordan secure soft loans and $500 million in grants to support the budget over five years for the implementation of development projects.