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, while also providing up to $800 million in political risk insurance for funds and investors managed by Meridiam SAS and Suez International SAS.
اضافة اعلان
In response to inquiries from Al Mamlaka, the DFC said the project includes the design, development, construction, operation and maintenance of a seawater desalination plant and a water transmission system, as well as a dedicated power generation facility, under a Build-Operate-Transfer (BOT) model.
The DFC said Jordan is facing a severe and growing water crisis driven by declining rainfall, overexploitation of groundwater, aging infrastructure and rapid population growth resulting from refugee inflows.
According to the corporation, 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 a loan of up to $1 billion and political risk insurance of up to $800 million.
The corporation said its initial assessment found that the project’s impacts must be managed in accordance with the International Finance Corporation’s environmental and social performance standards. These include labor and working-condition risks, resource efficiency and pollution prevention, community health and safety, land acquisition, biodiversity conservation and cultural heritage protection.
The DFC also identified potential impacts on natural and critical habitats, as well as internationally recognized and protected areas. These include the effects of highly saline water discharge on marine ecosystems, in addition to risks related to cultural heritage.
The total cost of the National Water Carrier project is estimated at approximately $5.8 billion. It has secured around $663 million in international grants from the United States, the 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 contribution to a capital project in the Kingdom’s history, according to government data.
A total of 29 donors and international financing institutions are participating in the project. The financing plan also includes $2.9 billion in private-sector financing for Meridiam from international financial institutions, along with up to $1.1 billion from a consortium of Jordanian commercial banks.
The Social Security Investment Fund is also participating in financing provided through the banking consortium, in addition to contributing to the project’s equity alongside Meridiam.
Among the international financing commitments 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 necessary incentives and exemptions to enable the project to begin implementation within the Aqaba Special Economic Zone.
The government signed the project’s final technical and legal agreement in April.
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 transport the water north through pipelines extending approximately 450 kilometers, using pumping systems capable of lifting water to elevations of around 1,100 meters above sea level.
The project is expected to provide approximately 40% of Jordan’s drinking-water needs. Its annual production will approach the combined storage capacity of all dams in the Kingdom and will be nearly three times the output of the Disi water 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 frequency 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 combined capacity of approximately 300 megawatts, covering around 30% of the energy required for desalination, pumping and water transmission operations.
The project will be implemented under a Build-Operate-Transfer (BOT) model, with full ownership to be transferred to the Jordanian government after 26 years of operation. The government aims to begin pumping water from the project in 2030.
Source: Al Mamlaka
