The FINANCIAL — The European Bank for Reconstruction and Development (EBRD) is helping to address energy security and climate change challenges in Jordan with financing for a new energy-efficient power plant in the country.
The EBRD is providing a US$ 95 million A/B loan for the construction of a 485 megawatt (MW) combined-cycle gas turbine (CCGT) thermal power station located 40 kilometres north-east of the capital Amman.
The loan will be provided to Mahatat Al Zarqa Le Tawleed Al Takah Al Kahrabaieyah, a limited liability company incorporated in Jordan and majority-owned by ACWA Power International, a major international energy company, according to EBRD.
The new Zarqa combined-cycle gas turbine plant replaces the obsolete Hussein thermal power station and will be twice as efficient. The new plant involves a fuel switch from oil to natural gas that will result in significant greenhouse gas emission savings in the country.
Additional energy-efficient replacement power is essential to the stability of the Jordanian electricity network to address a rapidly growing demand on the back of the influx of refugees from neighbouring Syria and as older, less efficient plants are being decommissioned.
The investment will also play an important role in Jordan’s transition to a low-carbon economy, because the new plant will also increase the required base load power in the country. This in turn will facilitate the successful integration of more renewable sources of energy in the system. The EBRD has been a strong supporter of sustainable development within Jordan’s energy sector since 2012, including financing six solar power plants (total of 164 MW), one wind power plant (82 MW) and one 240 MW thermal power plant. The latter, IPP4, was the Bank’s first investment in the country in 2012.
Nandita Parshad, EBRD Director for Power and Energy, said: “We are very pleased to be working again with our partner ACWA Power International to finance this landmark transaction. This will be the largest energy project financed by EBRD in Jordan to date and it will support the government’s goal of meeting rapid electricity demand growth. It will also provide a highly competitive electricity price and help the grid manage the increasing share of renewables in the Jordanian energy mix.”
Rajit Nanda, Chief Investment Officer of ACWA Power International, said: “This is yet another important project for ACWA Power in Jordan, adding to our presence as one of Jordan’s largest power generators (through CEGCO and the Mafraq PV IPP). Our continuing partnership with the EBRD in Jordan has been an important factor in us providing Jordan’s national electric power company NEPCO with a tariff that is among the lowest witnessed in Jordan’s conventional power sector in the last decade.”
Jordan became an EBRD shareholder in 2012 and to date the Bank has committed US$ 833 million across 33 projects in various sectors of the economy, in addition to US$ 120 million of trade facilitation credit lines with local banks. This investment brings the total capacity of energy projects financed by the EBRD in Jordan to 971 MW.
The EBRD’s strategic plan for the period 2016-18 has three priorities: strengthening economic resilience, addressing global challenges and supporting regional integration. In the context of the EBRD’s focus on the Green Economy Transition since late 2015, the Bank will continue its strong support of financing highly efficient and renewable energy projects in Jordan.