AMMAN — The
International Finance Corporation (IFC) said it is pioneering investment in Jordan’s first green
bond, in order to help funding green projects in the country, addressing
growing climate challenges and supporting sustainable economic growth,
according to an IFC statement on Sunday carried by the Jordan News Agency,
Petra, reported.
اضافة اعلان
IFC is investing up to $50 million in the
five-year bond, issued by leading private sector bank
Jordan Kuwait Bank (JKB).
The financing includes up to $36 million from IFC’s own account, and a blended
finance co-investment of up to $10 million from the Canada-IFC Blended Climate
Finance Program and $4 million from the Dutch-funded MENA Private Sector
Development Facility, both implemented by IFC.
Jordan’s first green bond will be fully
compliant with the International Capital Market Association’s green bond
principles, which offer best practices to issuers in regard to transparency and
disclosure, the statement said.
Managing the bondJKB will earmark the funds for green
projects and assets including renewable energy projects, low-carbon vehicles,
green infrastructure such as low-carbon transport, new energy-efficient green
buildings, and sustainably managed water resources and waste.
"We hope this first green bond will not only promote climate-smart, sustainable projects in Jordan, but also set the standard for green bonds in the market and encourage others to follow suit."
IFC’s advisory services will also help
build the bank’s technical capacity so it can identify eligible projects and
develop a framework to measure and report on impact.
"We are introducing a new asset class
to the Jordanian capital market that is designed towards building an
environmentally sustainable and responsible banking industry. This partnership
with
IFC supports JKB’s strategy in advancing its positioning and adaptability
to the correct and potential demand for sustainable financing by providing
innovative financing solutions in the Jordanian market. This significant
initiative further aligns with Jordan’s
Economic Modernization Vision in which
sustainability is a cornerstone," said Haethum Buttikhi, CEO of Jordan
Kuwait Bank.
Creating a new marketJordan, one of the world’s most
water-stressed countries, is facing severe climate change risks, aggravated by
inconsistent rainfall, higher temperatures, and a population increase driven by
the refugee influxes.
According to the World Bank Group’s Country Climate and Development Report, Jordan needs $9.5 billion in investments to move towards low-carbon development and foster a greener economy. Over 60 percent of that figure will need to come from the private sector.
Despite this, green and climate finance are
still nascent in the country and there is no green bond market.
"Mobilizing private sector financing
and exploring innovative financing options for climate mitigation and
resilience projects are crucial to address the drivers and impacts of climate
change," said Khawaja Aftab Ahmed, IFC Regional Director for the Middle
East, Pakistan, and Afghanistan. "We hope this first green bond will not
only promote climate-smart, sustainable projects in Jordan, but also set the
standard for green bonds in the market and encourage others to follow
suit."
Targets and past investmentsAccording to the
World Bank Group’s Country
Climate and Development Report, Jordan needs $9.5 billion in investments to
move towards low-carbon development and foster a greener economy. Over 60
percent of that figure will need to come from the private sector.
IFC has contributed to Jordan’s private
sector development for half a century and invested more than $2 billion in the
country. IFC’s presence has helped deliver pioneering projects, including the
region’s first-of-its-kind Project Pipeline Development Facility, Jordan’s
first wind farms, and its largest renewable energy project at the time, Seven
Sisters.
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