Ammon News - The U.S. International Development Finance Corporation (DFC) has approved up to $1 billion in financing in the form of a loan for Jordan’s National Water Carrier Project, in addition to up to $800 million in political risk insurance for funds and investors managed by Meridiam SAS and Suez International SAS.

The DFC said the project includes the design, development, construction, operation and maintenance of a seawater desalination plant and a water conveyance system, as well as a dedicated power generation plant, under a Build-Operate-Transfer (BOT) model.

The agency said Jordan faces a severe and growing water crisis driven by declining rainfall, over-exploitation of groundwater, aging infrastructure, and rapid population growth resulting from refugee inflows.

It added that the project is expected to cover 75% of Jordan’s projected water deficit by 2040, while reducing reliance on depleted water resources and supporting job creation and regional stability.

The DFC classified the project as 'high impact' under its Impact Quotient framework.

The financing package includes both a loan and political risk insurance, with the DFC loan reaching $1 billion and political risk insurance totaling up to $800 million.

The DFC noted that its initial assessment identified the need to manage the project’s impacts in line with the International Finance Corporation’s environmental and social performance standards, including labor and working-condition risks, resource efficiency and pollution prevention, community health and safety, land acquisition, biodiversity conservation, and cultural heritage protection.

The agency also identified among the key risks potential impacts on natural and critical habitats and internationally recognized and protected areas, including the effects of highly saline water discharge on marine ecosystems, as well as risks related to cultural heritage.

The National Water Carrier Project has a total estimated cost of approximately $5.8 billion. It has secured international grants worth around $663 million from the United States, European Union, Germany, the Netherlands, the United Kingdom, France, Italy, Japan and the Green Climate Fund.

The Jordanian government is contributing $722 million to the project, the largest budget allocation for a capital project in the Kingdom’s history, according to government data.

A total of 29 donors and international financial institutions are participating in the project’s financing. The financing plan also includes $2.9 billion in private-sector financing for Meridiam from international financial institutions, in addition to up to $1.1 billion from a consortium of Jordanian commercial banks.

The Social Security Investment Fund is participating in the financing provided through the banking consortium, as well as contributing equity to the project alongside Meridiam.

Among the international financing announced for the project, the European Bank for Reconstruction and Development (EBRD) has approved a senior loan of up to $475 million for the National Water Carrier project company, with the possibility of mobilizing additional financing.

The government continues to take steps related to the project’s implementation. On September 17, the Cabinet approved a package of facilities and exemptions required to begin implementation within the Aqaba Special Economic Zone.

In April, the government signed the project’s final technical and legal agreement.

The National Water Carrier is one of Jordan’s largest water infrastructure projects. It will desalinate 300 million cubic meters of seawater annually in Aqaba and pump it northward through pipelines extending approximately 450 kilometers, with pumping systems reaching elevations of around 1,100 meters above sea level.

The project is expected to provide nearly 40% of Jordan’s drinking-water needs. Its annual production will approach the combined storage capacity of all of the Kingdom’s dams and will be approximately three times the output of the Disi project.

The government expects the project to increase annual per-capita water availability from around 60 cubic meters to 110 cubic meters, while increasing water supply from one day to three days per week. It is also expected to ease pressure on traditional water sources and meet Jordan’s water needs through 2040.

The project includes the construction of solar power facilities with a capacity of approximately 300 megawatts, covering around 30% of the energy required for desalination, pumping and water transportation.

The project will be implemented under a Build-Operate-Transfer (BOT) model, with full ownership transferring to the Jordanian government after 26 years from the start of operations. The government is targeting the start of water deliveries in 2030.