At a Glance
|Start Date||Q1 2017|
|Approved Budget||USD 1 465 000|
As one of the smallest economies in the Middle East, Jordan has high ambitions for economic growth but faces a number of challenges to sustainable development. Given the central importance of economic development, Jordan’s traditional approach to economic growth has driven some of the key challenges that it now faces, such as water scarcity and an overreliance on external resources, particularly oil. While Jordan achieved high economic growth from 2002-2008, neither poverty nor unemployment were significantly reduced54. As a result, many young Jordanians leave the country to find employment. This is exacerbated by the complex and unpredictable challenge of the refugee crisis.
In particular, Jordan has scarce water resources and is currently using them at a rate twice that of natural replenishment. The country’s short-term strategy is heavily reliant on using groundwater resources, which are expensive and energy intensive to access and desalinate, accounting for about 14% of Jordan’s total energy demand55. If current trends continue, Jordan will have less than 100 cubic meters of water available per person by 2025 and will face absolute water shortage56.
In addition, Jordan faces some serious challenges relevant to green finance. Although there are several green financing mechanisms established in Jordan that can support small scale projects, these mechanisms do not have sufficient financial resources or technical capability to support country priorities and high level development projects.
In response to these challenges, Jordan will launch the National Green Growth Plan (NGGP) in 2016. The NGGP provides a comprehensive development approach to green growth planning and implementation, supported by the quantitative analysis of twenty-four projects across six green growth sectors, namely energy, water, waste, transport, tourism and agriculture, as well as an analysis for the green financing environment in Jordan. A common theme throughout the NGGP is the need to alleviate pressures from the Syrian refugee crisis in Jordan. While demonstrating green growth benefits, implementation interventions must address the importance of providing equal employment opportunities to Jordanian citizens and refugees alike. This reflects the most pressing social development priorities of both the Government of Jordan (GoJ) and international donors.
The NGGP is the first document that aims to mainstream green growth into government policy-making. It is seminal for the success of green growth in Jordan that recommendations made in the NGGP are adopted and that resources are mobilized toward implementation.
Building on 2015-16 Work
GGGI’s 2015-16 program in Jordan focused on the development of the Jordan’s National Green Growth Plan. Complementing this is GGGI’s work on strengthening the supporting institutional framework and stakeholders’ capacity for implementation.
GGGI has also explored barriers and opportunities regarding the availability of existing finance to provide the quality and quantity of green financing needed to support green growth implementation. Over 20 green growth project categories were assessed at a detailed level, including the most suitable types of financing available for consideration. Current funding facilities both in Jordan, such as Jordan Renewable Energy and Energy Efficiency Fund and the Jordan Environment Fund, and international commercial and concessional finance were assessed. As a result, GGGI made 12 key recommendations to the GoJ.
The WPB 2017-18 will support and expedite the implementation of the NGGP and Implementation Roadmap, where specific projects will be taken to financing. GGGI will continue to build capacity for implementation, and will provide technical assistance to support operationalization of the Jordan Environment Fund (JEF). GGGI will help address financing barriers to the implementation of the NGGP and support the preparation of two bankable green projects with the goal of helping transform the country’s green financing model into one that supports green growth and provides better access to national and international green financing.
PROJECT OUTPUTS FOR 2017-18:
- Prepare feasibility study and financial arrangements for 2 bankable projects in water, green energy or green transport and submit to government
- Deliver 4 training events to build capacity in relation to green growth policies and approaches
- Provide technical assistance to strengthen the implementation of the Jordan Environment Fund
PROJECT OUTCOMES FOR 2017-18:
- Government approves bankable projects for further development and financing
- 70% of training participants gain improved knowledge or skills relating to green growth
- Jordan Environmental Fund is operating more effectively, with capitalization of $1 million and financing mobilized for 2 approved projects
The overall outcomes of the project are to take Jordan’s National Green Growth Plan to implementation through the development of a green financing mechanism and the development of two – high priority – bankable projects. GGGI will achieve this through the delivering the following outputs:
Feasibility study for two bankable projects prepared and submitted. GGGI will develop two bankable projects in the water, energy or transport sector for submission to government. The final selection of projects will be based on a project identification process that will take place during the second half of 2016. Out of the 24 interventions presented in the NGGP, two have been taken into further analysis and developed as business cases and are potential candidates for selection. These include procurement approaches for electric vehicles in Amman and procurement approaches for Solar PV powering water desalination and pumping. For the identified projects, GGGI will develop concept notes, confirm government support, engage with relevant stakeholders and develop a financing plan. GGGI will provide technical support in the feasibility study, including financing structure. Additionally, GGGI will explore opportunities to engage with and/or benefit refugees through Environmental Social Impact Assessment (ESIA) for bankable projects.
Capacity building training events delivered. GGGI will design and implement training and awareness programs to build capacity among public sector stakeholders to develop bankable projects. Training programs will also build capacity of potential implementing entities on GCF accreditation requirements. GGGI will conduct a technical assessment on one of the bankable projects selected for development, potentially on water desalination. The assessment will be used as a tool to help project stakeholders make informed decisions about the selected project’s economic viability, technical options and potential risks.
Implementation of Jordan Environmental Fund strengthened. GGGI will work on the development of the JEF by supporting operation and implementation of the Jordan Environment Fund (JEF) with the aim of finding a green financing instrument within the governmental body in Jordan. In the implementation and operationalization phase, GGGI will support the JEF’s day-to-day operations, organize regular stakeholder meetings to assess the operational status of JEF and advise the JEF on project origination and development as needed. GGGI will also help to implement monitoring and evaluation of JEF operation and management and support the JEF’s securing access to external financing.
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