Ammon News - Jordan and the World Bank (WB) on Monday sealed two new loan agreements to support climate-responsive investments and help improve the efficiency of Jordan’s electricity sector.

The agreements were signed by Minister of Planning and International Cooperation, Zeina Toukan, and the World Bank Country Director for the Middle East Department, Jean-Christophe Carret, on the sidelines of the World Bank Spring Meetings in Washington DC.

According to a WB statement on Tuesday, the international financial institution approved additional financing of $400 million for the Jordan Inclusive, Transparent, and Climate Responsive Investments Program for Results to intensify efforts to boost climate-responsive public and private investment, promote jobs and business opportunities for women, and strengthen government effectiveness through participatory, data and evidence-based policymaking.

It also approved additional financing of $250 million for the Electricity Sector Efficiency and Supply Reliability Program for Results, which aims to improve the efficiency of Jordan’s electricity sector, maintain the country’s significant progress on the reliability of electricity service, and strengthen sector governance.

"We appreciate the continued partnership and support of the WB for Jordan’s reform and development priorities. These two new programs will help the government’s efforts to implement the Economic Modernization Vision Executive Program 2023-2025 which is focused on advancing Jordan’s climate agenda, promoting green investment-led growth, and improving the efficiency and reliability of our electricity sector," said Zeina Toukan.

For his part, Carret said that thanks to adaptive policies, Jordan has shown resilience to major regional and global crises, adding that these two programs will support the Government of Jordan’s economic reform agenda and help the Kingdom continue its home-grown structural reforms to achieve inclusive, sustainable and investment-led growth and job creation, particularly for youth and women.

Since 2021, Jordan has strengthened its climate agenda including by scaling up its commitments to the Nationally Determined Contribution (NDCs), by significantly increasing emission reduction targets, and by prioritizing green public and private investments.

The additional financing will aim to further strengthen the quality of public investment and prioritize climate-responsive public investment, including through public-private partnerships. It will enable a stronger set of interventions to scale up financing including supporting steps toward the possible issuance of a sovereign green bond in the future and the implementation of a National Green Taxonomy. Program activities will support reforms and investments that create job opportunities.

The program will also aim to support government accountability and information sharing by incentivizing government responsiveness to citizen feedback through e-participation and supporting the production and analysis of critical statistical information to inform policymaking, including on gender. In accordance with the recommendations of the Jordan Country Climate and Development Report, the PforR will also support Jordan’s goals to achieve a low-carbon trajectory with the current NDC target of 31 percent of renewable energy in the electricity supply mix.

Jordan has made significant progress in improving the reliability of its electricity supply, increasing the share of renewable energy in the electricity supply mix from 6 percent in 2017 to 26 percent in 2021, and introducing private investments in the sector through public-private partnerships. Despite these achievements, the electricity sector faces several challenges that impede efficient growth in the long term. These include the National Electric Power Company’s (NEPCO) difficult financial situation, the increase in electricity purchase costs, and the increase in debt service costs.