The EU Bank Boosts its Support to Jordan

• EUR 870 million expected financing during 2019-2020 for infrastructure and private sector
• “Deir Alla Water Supply and Sanitation” project to receive EUR 65 million financing, serving 85,000 people
• EIB opens Amman office to strengthen relations with partners

The European Investment Bank (EIB) plans to extend EUR 870 million of loans and grants during 2019-2020 to support infrastructure and the development of the private sector as part of its contribution to the EU’s support for Jordan. The President of the EU Bank, Werner Hoyer, announced EIB’s plans in London today alongside EU and world leaders during the “Jordan: Growth & Opportunity – The London Initiative 2019” conference co-hosted by the government of Hashemite Kingdom of Jordan and the United Kingdom government.

At the conference, the Jordanian government and the EIB signed a loan agreement of EUR 65 million to finance the improvement of water supply systems in the “Deir Alla and Al-Karamah” districts in the Jordan valley, as well as the construction of a centralised sewage collection and treatment network in Deir Alla district. The EIB’s support is part of EIB’s Economic Resilience Initiative (ERI) designed to strengthen the EU Southern Neighbouring countries’ ability to withstand shocks. The project will benefit from an additional investment grant of EUR 16.3 million from the Economic Resilience Initiative Fund (ERIF). The EIB’s finance will improve water supply and sanitation services for more than 85,000 people in the Jordan Valley and will have a positive impact on agriculture, environment, and tourism in the Jordan Valley  region.

The agreement was welcomed by key EU and Jordanian partners.

“As leaders gather in London to pledge support for Jordan, the EU bank is demonstrating Europe’s commitment to resilience, stability, and quality of life in the country. Projects like “Deir Alla Water Supply and Sanitation” provide water services to Jordanians and refugees alike. We must help public investment but focus also, and primarily, on private financing. In Jordan like elsewhere, public resources alone will never be enough to trigger growth that is sustainable, inclusive, and helps make the coming competitive and resilient. We have more projects in the pipeline that will more than double our investment in the country over the next two years, to well over 1 billion dollars. Two thirds of our investment will target the private sector. Our newly opened office based in the EU Delegation in Amman will play a key role in bringing the EU Bank’s contribution to carry out the country’s efforts and vision, coordinating with our partners on the ground and working closely with the Government”, said Werner Hoyer, the President of the European Investment Bank at the signature event.

“The Government of Jordan is grateful for new EIB financing that will support our plans to provide better access to water and sanitation services. The EIB has significantly been supporting Jordan’s economic development over the years by investing in key sectors of our economy such as mining, industry, water, education, and energy in addition to private sector operations”, said Mary Kawar, the Minister of Planning and International Cooperation. “Furthermore, I would like to thank EU donors supporting the Economic Resilience Initiative (ERI) for the technical assistance and investment grants provided to the project,” added Mrs Kawar.

Frederica Mogherini, High Representative of the Union for Foreign Affairs and Security Policy said “The partnership between the EU and Jordan is strong and solid, and the EU is engaged in supporting Jordan’s stability and its resilience. With this financing agreement, we further strengthen our mutual commitment to delivering on the Partnership Priorities we agreed in 2016 and our joint determination to enhance Jordan’s social and economic development. EIB’s financing of the water supply system will benefit some of the most vulnerable groups in Jordan and have a positive environmental impact in the country“

Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations stated “I would like to commend the Jordanian Government and our EIB colleagues on today’s signing of the financing agreement to improve the water supply in the Jordan Valley. This project is a good example of how the EU seeks to improve the lives of the people in this vulnerable region – both the local population and Syrian refugees. The European Commission has been pleased to support the development of this project and looks forward to its implementation.”

Minister for the Middle East, Alistair Burt, said: “The UK government stands firmly behind Jordan’s ambitious plans to reform and revitalise its economy. We are proud to play a leading role in helping Jordan build new infrastructure as it creates a bright future for its people.  “We welcome the European Investment Bank’s commitment to invest in Jordan and help build its private sector, driving growth and opportunities for Jordanian, UK and international businesses.”

Andrea Matteo Fontana, European Union Ambassador to Jordan added: “The EU supports  water sector in Jordan in a holistic way, including through its Mediterranean Hot Spots Investment Programme (MeHSIP) , which provides direct technical advice and support to promoters for the preparation of investment projects in the water and environmental sectors of the Southern Mediterranean Countries. The sustainable use of scarce water resources is of vital importance in Jordan and the “Deir Alla and Al-Karamah” project will play an important role by promoting the renewal of water supply networks.”

The “Deir Alla Water Supply and Sanitation” project is a good example of cooperation between donors and the EIB to support the preparation and implementation of the project. It is financed under the External Lending Mandate (ELM) guarantee provided by the EU to the EIB. The feasibility study was prepared with the support of the EU funded Mediterranean Hot Spots Investment Program (MeHSIP).

The grant for the preparation of the feasibility study was provided by the Climate Action in the Middle East and North Africa (CAMENA) initiative. CAMENA is a climate action endowment under the exclusive support of the UK Department for International Development (DFID) and managed by the EIB. So far, CAMENA has provided grant support for five operations with a total value of around EUR 2 million.

The EIB plans to extend EUR 800 million of loans over 2019-2020, split between the public (EUR 200 million) and private sectors (EUR 600 million). On top, EUR 70 million of grants are expected to be procured for projects, in a variety of sectors including water, energy efficiency, support to SMEs, microfinance etc.

EIB has opened its Amman office at the EU Delegation at the end of 2018 to coordinate and liaise with the Jordanian government as well as business associations and investors in the country.

Since 2007, the Bank has provided total financing of EUR 660 million to support key economic and social sectors in Jordan; the water sector which accounts for 38% of total EIB lending operations followed by the energy, industry, transport and education sectors.

Source: The European Investment Bank