The EBRD is providing a US$ 100 million loan for the construction and development of the Al Manakher power plant in Jordan, in a transaction aimed at helping to address the country’s acute energy shortages and ensuring the security of future energy supplies.
The construction of the new plant, located 15 km east of the Jordanian capital Amman, is urgently needed to provide extra capacity to prevent blackouts at times of peak demand and to secure short-term electricity supplies to Jordan at a time when demand is growing rapidly.
In the medium term it will also help prepare the Jordanian electricity grid for the greater use of renewable energy sources.
Jordan imports over 95 per cent of the energy it consumes and helping to develop sustainable energy resources and increase energy security is a key plank of the EBRD’s strategy to support the modernisation of the Jordanian economy.
The 240 MW peaking power plant is being developed and will be operated by AES Levant Holding BV Jordan PSC, a special purpose vehicle owned 60 per cent by AES Corporation and 40 per cent by Mitsui and Co. Ltd. The project will be co-funded by a US$ 170 million loan from the US Overseas Private Investment Corporation (OPIC). It will be located next to the existing Amman East plant owned by the same sponsors and also part financed by OPIC. The project will thus build on the sponsors’ track record of successful operations in Jordan.
“We are delighted to be financing the EBRD's first power project in Jordan and indeed in the southern and eastern Mediterranean. This is a region where demand for power is growing fast and it is crucial to secure private sector investment to deliver this vital infrastructure. Jordan faces a real and immediate challenge in securing a stable and reliable power supply, which this plant will meet using the most modern and efficient technology. The project also builds on the EBRD’s long-standing relationship with AES Corporation while giving us the opportunity to begin a partnership with OPIC, which has already made such a strong contribution to Jordan's development,” said Nandita Parshad, Director of Power and Energy for the EBRD.
“This Al Manakher project is a landmark in the commencement of our operations in the southern and eastern Mediterranean and the power sector together with private sponsors," said Hildegard Gacek, EBRD Managing Director for the southern and eastern Mediterranean. "Since we initiated operations in the region in September 2012 we have already signed four projects totalling €195 million. We are determined to justify the confidence our shareholders have shown in us by doing our bit to support this region in meeting the urgent challenges it faces.”
"The Al Manakher power plant follows on from the success of our Amman East power plant, providing safe and reliable power for the growing demands of the Jordanian economy," said Julian Nebreda, Senior Vice president for Europe, Middle East and Africa for the AES Corporation. "AES is committed to provide energy solutions to meet the needs of the countries we serve. The Al Manakher plant is an example of this commitment. The plant will support the growth of the Jordanian economy and will strengthen and provide flexibility to the electricity grid. We are pleased to be working with Opic and the EBRD who share our commitments".
Ensuring that Jordan’s citizens have reliable electricity at all times, even during peak usage periods, is a critical service. This project will help Jordan meet that need even as its electricity demand continues to grow,” said OPIC President and CEO Elizabeth Littlefield. “We are pleased to support these services for the people of Jordan and to partner with EBRD and AES to make this project a reality.”
The EBRD started investing in Jordan earlier this year, providing financing in September to help support the trading operations of Jordanian companies.
By 2015, the EBRD expects to be investing up to €2.5 billion across the southern and eastern Mediterranean region which comprises Jordan, and also Morocco, Egypt and Tunisia.
It extended its reach to this area in response to calls for support from the international community and from the countries themselves following political changes in the region. The EBRD was originally set up in 1991 to foster the development of market economies primarily in central and eastern Europe.