NEPCO’s debts to be transferred to gov’t — energy minister

(Photo: Jordan News)
AMMAN — Minister of Energy and Mineral Resources Saleh Al-Kharabsheh said on Wednesday that his ministry was working, in coordination with the Ministry of Finance, on a plan to transfer the current debt, estimated at JD5.5 billion, which is based on commercial terms, to the Ministry of Finance and replace it with soft financing with few conditions.اضافة اعلان

He said that successive losses over the years suffered by the National Electric Power Company (NEPCO) had resulted in the accumulation of mounting debts, according to Ammon News.

The minister added that the ministry is working with the company on a plan to improve both revenues and services provided.

"Through this plan, we hope that the company will move from making losses to a stage of parity or securing modest profit margins that will enable it to pay off the debt," Kharabsheh said.

He predicted that the company will suffer more losses in the coming two or three years, but in the future, following the measures taken, it is expected to move from loss to profitability, and thus financial sustainability.

In 2020, NEPCO confirmed that its accumulated debts were estimated at about JD5.5 billion, which cost them about JD120 million annually in debt service fees and interest for the loans they entailed to commercial banks.

Last month, the International Monetary Fund (IMF) said in a report that the government is preparing to update NEPCO’s financial sustainability roadmap. IMF added that the roadmap will look at the option of transferring NEPCO’s debts to the Finance Ministry in order to reduce its costs.

“The roadmap also might transfer some of NEPCO’s debts to the central government in order to facilitate refunding the debts due in 2022 and 2023 with a lower cost and longer due dates, in addition to reducing the pressure on the national exchange system,” said the report, pointing out that this will require enhancing the companies’ participation in NEPCO’s affairs, including in the current reforms which are supported by the European Bank for Reconstruction and Development.

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