Amman, Jordan, January 31, 2017—IFC
and MIGA, members of the World Bank Group, are backing the design, construction,
ownership and operation of a 485-megawatt gas-fired power plant in Jordan
to increase the country’s power generation capacity, while mitigating
the impact on the environment. Once operational, the plant will generate
power at about a third of the current average cost in Jordan.
IFC is investing up to $75 million in
the combined cycle plant, located in the Zarqa Industrial Zone, and mobilizing
$200 million of debt, alongside a consortium of lenders. MIGA is providing
a guarantee for 20 years, covering up to $215.6 million in commercial debt
(principle and interest).
The project is being developed by ACWA
Power, a leading developer of power plants in the Middle East and North
Africa, at a cost of about $485 million. It will replace one of the country’s
oldest and least efficient fuel oil-fired power plants, which is currently
being decommissioned, with one of Jordan’s most energy-efficient, eco-friendly
gas-fired power plants.
“This will be a climate-friendly addition
to Jordan’s power supply, with the use of combined cycle gas turbine technology
helping to significantly reduce greenhouse gas (GHG) emissions, particularly
compared to the plant it replaces,” said Rajit Nanda, ACWA Power’s Chief
The Zarqa plant is expected to generate
a gross average of 3,200 gigawatt hours of electricity per year, serving
approximately 620,000 individual residential customers annually and adding
about 150 megawatts to the national grid, urgently needed as the country’s
influx of up to 2 million refugees increases energy consumption. It will
reduce total GHG emissions by approximately 1,744 ktCO2/annum.
“IFC is a long-term partner for Jordan,”
said Mouayed Makhlouf, IFC Director for the Middle East and North Africa.
“We invested in the power generation sector in 2011 to, among other things,
modernize older power plants using existing infrastructure, where possible.
We are excited to see our long-term goal fulfilled, as the Zarqa plant
will use the same site as the Hussein thermal power station, benefiting
from existing infrastructure and a prime location near Amman and Zarqa.”
IFC’s priority in Jordan is to help
the government restore the energy sector’s sustainability, and diversify
the energy mix away from oil-based generation towards renewable and clean
energy. The project also fits within the World Bank Group’s Country Partnership
Framework for Jordan to support private sector investment in key infrastructure,
mobilize long-term capital to help bridge the funding gap, and have a significant
climate change impact.
MIGA’s guarantee provides coverage
to the issuers of commercial debt for the project, Industrial and Commercial
Bank of China Ltd and China Construction Bank Corporation Limited, against
the risks of Transfer Restriction, Expropriation, War and Civil Disturbance
and Breach of Contract.
“The demand for power in Jordan is
rising rapidly,” said Sarvesh Suri, Director of Operations and MIGA. “Among
the best ways to meet this demand is modernizing Jordan’s power generation
Previous IFC investments in Jordan include
the 117-megawatt Tafila wind farm, Jordan’s first private commercial-sale
renewable power project, and eight of the country’s first commercial-scale
solar PV projects. MIGA has supported four renewable energy projects in
Jordan to date, and its gross exposure in Jordan as of Dec 31, 2016 was
IFC, a member of the World Bank Group,
is the largest global development institution focused on the private sector
in emerging markets. Working with 2,000 businesses worldwide, we use our
six decades of experience to create opportunity where it’s needed most.
In FY16, our long-term investments in developing countries rose to nearly
$19 billion, leveraging our capital, expertise and influence to help the
private sector end extreme poverty and boost shared prosperity. For more
information, visit www.ifc.org
MIGA was created in 1988 as a member
of the World Bank Group to promote foreign direct investment in emerging
economies by helping mitigate the risks of restrictions on currency conversion
and transfer, breach of contract by governments, expropriation, and war
& civil disturbance; and offering credit enhancement to private investors
and lenders. For more information, visit www.miga.org