In the June 2017 Jordan Economic Monitor report co-sponsored by the Ministry of Planning and International Cooperation, the World Bank reported that the country’s green energy segment holds considerable potential to reduce fiscal, economic and environmental vulnerabilities. In addition to the adoption of climate-friendly fiscal policies and greater mobilisation of climate finance, were recommendations for public policies that emphasise private sector engagement to support growth that uses natural resources efficiently, minimises pollution and ecological impacts, and considers the natural hazards posed by global warming.
Jordan has already established its position in the development of clean energy in the MENA region, thanks to the 2012 Renewable Energy and Energy Efficiency Law and its associated by-laws, which enabled the launch of incentive schemes and procurement methods for awarding long-term power purchase agreements to renewable energy projects. These included the Middle East’s first feed-in tariff framework; acceptance of unsolicited expressions of interest from investors through a direct submission proposal procurement scheme; the introduction of net metering and wheeling arrangements to encourage small-scale renewable energy projects on industrial, commercial and residential sites; and a recently reformed tendering process that enables competitive tariff bidding.
Key Sector Targets
The Jordan Economic Growth Plan (JEGP) 2018-22, a mid-term development strategy unveiled in May 2017, targets 13% annual expansion in the electricity and water sectors, reporting that investment in both utilities is critically needed given their importance in manufacturing and agriculture, as well as rising demands on basic services.
Although long-term multilateral loans offer a solution, public-private partnerships using the build-operate-transfer model are also a viable option, with the JEGP recommending that the government focus on investments that can reduce external energy dependency, such as renewable energy and water capture and efficiency programmes. This will require boosting private investment in the transmission grid, as well as in smart electricity usage.
Green Growth
In May 2017 the authorities also launched the National Green Growth Plan (NGGP), a collaboration between the Global Green Growth Institute, the Ministry of Environment, various stakeholders and over 100 national and international experts. The NGGP will include a series of measures aimed at encouraging eco-friendly growth and creating new job opportunities with 24 projects in six priority sectors: energy, water, waste, agriculture, transport and tourism.
The NGGP identified three clusters – the Green Growth Corridor Cluster (GGCC), the Smart Urban Cities Cluster (SUCC) and the Rural Resilience Cluster (RRC) – as points for climate action, sustainable local development and macroeconomic considerations. The GGCC project will converge with a similar initiative launched by the National Electric Power Company to boost environmentally friendly economic expansion. The corridor will be implemented through the creation of multiple interlocking projects, many of which are renewables-focused. With clean energy technologies, including concentrated solar power and wind, recommended for exploration along the corridor, the JEGP has targeted boosting the national electrical grid capacity from 500 MW to 1450 MW by the end of 2019.
Development under the SUCC is aimed at increasing public transportation, waste management and green energy service projects, which would improve the quality of service delivery and the financial sustainability of utilities and service providers.
The RRC, meanwhile, focuses on strengthening rural communities and their ecosystems through projects that diversify incomes away from agriculture, ensure resource availability and reduce ecological impacts. Job provision is one of the most important aspects of the cluster, with the plan also targeting growth in tourism.
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