Multilateral guarantee key to finance 485MW Jordan plant

Two World Bank subsidiaries are backing a $485 million power plant in Jordan, a project the group says will reduce greenhouse emissions and meet rising power production needs.

The International Finance Corporation is investing up to $75 million in the 485MW gas-fired plant, which will be built in the Zarqa region outside Amman and will replace the Hussein power station, one of the country’s oldest and least efficient plants. The IFC will also mobilise $200 million of debt alongside a consortium of lenders while the Multilateral Investment Guarantee Agency will cover up to $215.6 million in commercial debt for 20 years.

The project will be developed by ACWA Power, a Saudi energy company, and will “significantly reduce greenhouse gas emissions, particularly compared to the plant it replaces”, ACWA Power chief investment officer Rajit Nanda said. The Hussein station was built in the late 1970s and early 1980s and is currently being decommissioned.

The Zarqa plant will serve approximately 620,000 customers, adding around 150MW to the national grid, according to the World Bank. Jordan has seen more than 600,000 refugees cross into the country from neighbouring Syria since the 2011 outbreak of the Syrian civil war, an influx which the World Bank said has made additional sources of power “urgently needed”.

For MIGA, the World Bank Group’s political risk insurance and credit enhancement arm, the plant represents the second project coming out of the Middle East in recent months following the Elazig Integrated Health Campus in eastern Turkey in late 2016.

MIGA will cover the Zarqa project’s commercial debt issuers – Industrial and Commercial Bank of China and China Construction Bank – against the risks of transfer restriction, expropriation, war and civil disobedience and breach of contract.