The European Bank for Reconstruction and Development (EBRD) is continuing its support for renewable energy in Jordan by providing a US$ 54 million A/B loan to The Local Company for Water and Solar Energy Projects PSC, a wholly-owned subsidiary of International Company for Water and Power Projects (ACWA Power), for the construction of the ACWA Power Mafraq Photovoltaic Independent Power Plant.
The financing comprises an A loan from the EBRD of US$ 27 million and a B loan of the same amount from the Netherlands Development Finance Company.
The 60.3 MW photovoltaic (PV) power plant will be located in the King Hussein Bin Talal development area of the Mafraq region in north Jordan.
ACWA Power is one of the leading developers, owners and operators of power generation and desalination plants in the Middle East. The project was the winning bidder in Jordan’s second solar tender, offering the lowest tariff. The project’s tariff of 6.14 US cents per kilowatt hour proves that renewables can compete with conventional technologies and shows that competitive tariffs can be achieved without reliance on subsidies or concessional financing.
The project follows the highly successful first round of the solar programme by the Jordanian Ministry of Energy and Mineral Resources in which the EBRD financed 4 out of 12 solar PV projects in 2014 and the 86 MW Al Rajef wind farm in October 2016. This programme demonstrated the benefits of a competitive tender process and established Jordan as a market leader for renewables in the region.
Nandita Parshad, EBRD Director for Power and Energy, said: “We are very pleased to be partnering with our existing client ACWA Power to deliver this landmark transaction. It will provide electricity at a highly competitive price and supports the government’s goals of meeting rapid demand growth while improving the sustainability and affordability of electricity in Jordan.”
Rajit Nanda, Chief Investment Officer of ACWA Power said: “This is an important project for ACWA Power in Jordan. It strengthens our presence as one of Jordan’s largest power generators (through CEGCO, and the ACWA Power Zarqa - which is nearing execution) and is yet another demonstration of our commitment to the country. The partnership with the EBRD for funding this project has been a critical component in helping us support NEPCO by providing record low tariffs for renewable energy in Jordan.”
Jordan became an EBRD country of operations in 2012. To date, the EBRD has committed €676 million through 30 projects in various sectors of the economy. This is the sixth large-scale renewable project financed by the EBRD in Jordan and brings the total capacity of projects financed by the Bank in the country to more than 400 MW.
The EBRD’s strategic plan for the period 2016-18 has three priorities: strengthening economic resilience, addressing global challenges and supporting regional integration. In the context of the EBRD’s focus on Green Economy Transition since late 2015, the Bank expects to more than triple the volume of renewable energy financed in Jordan in the near future.
* The Local Company for Water and Solar Energy Projects PSC is a limited liability company incorporated in Jordan and ultimately 100 per cent owned by ACWA Power.