News
Story Highlights
- Since 2011, Jordan has made significant progress in developing new renewable energy private sector projects and is on track to reach its target of 10 percent renewable energy in the overall energy mix by 2020.
- The World Bank Group’s Board of Executive Directors approved the First Programmatic Energy and Water Sector Reforms DPL, which aims to improve financial viability and increase efficiency gains in the energy and water sectors.
- ESMAP is supporting the energy components of the DPL through assessment of restructuring options, review of procurement capacity and procedures, capacity building and training, and analytical work on power system planning and renewable energy.
Reforming the Energy and Water Sectors in Jordan: ESMAP's Support to Development Policy Lending
April 22 2016
Jordan’s historic vulnerability to fluctuations in fuel prices, coupled with the frequent interruptions in piped natural gas from Egypt since 2011, have severely taxed the budget. To compensate for the gas shortages, Jordan has resorted to importing more expensive diesel and fuel oil. This development encouraged the government to develop and implement programs to diversify and reduce cost of energy supply through the development of domestic renewable energy resources and alternate natural gas supply options for power generation.
Since 2011, Jordan has made significant progress in developing new renewable energy private sector projects and is on track to reach its target of 10 percent renewable energy in the overall energy mix by 2020. The World Bank is helping to support the government’s economic reform program in the energy and water sectors.
On September 18, 2015, the World Bank Group’s Board of Executive Directors approved the first loan in a programmatic series of two annual development policy loans (DPLs). The $250 million program, titled First Programmatic Energy and Water Sector Reforms DPL, aims to improve financial viability and increase efficiency gains in the energy and water sectors. The DPL series is aligned with the medium-term objectives of the government’s own “Jordan 2025: A National Vision and Strategy,” which seeks to achieve financial and environmental sustainability, enhanced productivity, and increased competitiveness.
The program is structured under two pillars:
- Improving the financial viability of the electricity and water sectors, which supports the government’s plan to set the electricity and water sectors on a path of sustainable cost recovery and its efforts to restore the creditworthiness of Egypt’s National Electric Power Company (NEPCO), by addressing its debt concerns after the gas supply crisis in 2010; and
- Increasing efficiency gains in the energy and water sectors, which supports the government’s programs that strengthen efficiency gains in the supply and demand sides of the energy and water sectors through deeper diversification to more economic and environmentally clean fuel supply resources and power generation mix, scaling up of energy efficiency programs in both sectors, and a more efficient utilization of water resources.
Technical assistance, funded by the Energy Sector Management Assistance Program (ESMAP), is helping the government implement the reforms outlined in the first DPL and lays the foundation for the subsequent second program.
More specifically, ESMAP is supporting the energy components of the DPL through five activities that ensure successful implementation. These are:
- Assessment of restructuring options of NEPCO to ensure its financial viability and sustainability;
- Review of NEPCO’s procurement capacity and procedures;
- LNG capacity building/training to develop local capacity in the area of LNG market fundamentals, operations, contract management, and utilization strategy; and
- Analytical work on power system planning and renewable energy.
Learn more about the Energy Assessments and Strategies Program.