Jordan lands USD 650 mn loan agreements from the World Bank to boost climate investments and electricity sector

Jordan and the World Bank (WB) have signed two loan agreements worth USD 650 mn to finance two projects targeting climate responsive public and private investments and improvements to the country’s electricity sector, according to a statement. The agreements were signed on the sidelines of the World Bank Spring meetings in Washington.

Where’s the money going? The bank will provide c. USD 400 mn to support the country’s climate responsive public and private investments to promote jobs for women and boost the government’s effectiveness through data and evidence-based policy making, according to the statement. The financing will “further strengthen the quality of public investment and prioritize climate responsive public investment, including through public-private partnerships,” the statement noted, and pave the way for the possible issuance of sovereign green bonds and the implementation of a National Green Taxonomy.

Jordan’s electricity infrastructure will also get a boost: USD 250 mn will be earmarked for improving the efficiency of the country’s electricity sector by introducing reforms with a focus on cost saving and revenue enhancement measures. Despite the country’s achievements of increasing the share of renewables in the electricity supply mix and introducing private investments to the sector, Jordan’s electricity sector still faces hurdles that hinder long-term growth, the statement notes, including losses by Jordan’s National Electric Power Company, a rise in electricity purchase costs, and an increase in debt service costs.

REMEMBER- Jordan needs to rake in c. USD 9.5 bn in investments between now and 2030 to move towards low-carbon development, according to the World Bank’s Country Climate and Development report. The country will have to source 60% of the funds from private sector financiers.