Gov’t in London signs hundreds of millions worth of agreements in soft loans, grants

AMMAN — The government on Friday outlined all the agreements and memoranda of understanding it signed at the London initiative, co-organised with the British government.

Minister of Planning and International Cooperation Mary Kawar said that the government and the European Investment Bank (EIB) had signed a loan agreement worth 65 million euros to finance the improvement of water supply systems in the Deir Alla and Al Karamah districts of the Jordan Valley, as well as the construction of a centralised sewage collection and treatment system in Deir Alla.

She added that the EIB’s support is part of the bank’s Economic Resilience Initiative, designed to strengthen the EU’s neighbouring countries’ ability to withstand shocks, the Jordan News Agency, Petra, reported.

The minister added that the project will benefit from an additional investment grant of 16.3 million euros from the Economic Resilience Initiative Fund, planned to be signed in the next few months.

Kawar also referred to a memorandum of understanding with the Agence Française de Développement (AFD), renewing the AFD’s support for Jordan and committing 1 billion euros over the period 2019-2022.

The minister said that the sum included 650 million euros as soft loans to support the general budget, with 400 million euros (100 million euros each year) and 250 million euros to support development projects.

Another 200 million euros is directed for non-sovereign finance through the AFD and Proparco, which is an AFD affiliate specialised in supporting the private sector, Kawar noted. 

The remaining 150 million euros will be delivered as grants and technical assistance through several initiatives to support the Jordan Response Plan, the EU Madad Fund and Green Climate Fund, among others, she added. 

The minister also said the government and the UK agreed to $1 billion in aid to the Kingdom, which will be delivered over five years. Of the total amount, $840 million will be given to Jordan as grants, while the rest will be provided through loan guarantees.

She said that the Jordanian and British governments also signed a memorandum of understanding to improve cooperation in the education and human resource sectors to support the implementation of the 2016-2025 National Strategy for Human Resources Development. 

Kawar added that the Japanese government also pledged development assistance to Jordan worth $300 million as soft loans to support the general budget and $100 million as grants for the next five years.

Media Minister and Government Spokesperson Jumana Ghunaimat on Friday described the London initiative as a critical milestone in Jordan’s endeavour to attain self-reliance.

Speaking on the show “60 Minutes”, from London, Ghunaimat underlined that it is one of many stops on the government’s journey to revitalise the economy and kick-start a new economic stage.

“We are in London to tell the world that Jordan is now ready to host investments... Having carried out extensive reforms in the past years, [Jordan] is now prepared to continue its fiscal and economic reforms endeavour in order to construct an attractive incubatory environment for investment,” Ghunaimat added.

Representatives and officials from 60 countries around the world attended the conference, according to a statement carried by the Jordan News Agency, Petra.

“The participation turnout is reflective of the international community’s political willingness, and that of the British government, to support Jordan and its growth plans,” she highlighted.

It shows that the world values the Kingdom’s efforts and those of His Majesty King Abdullah, regionally and globally, towards reinforcing the stability of the region, not to mention Jordan’s steadfast reforms, she said.

All the strong, positive messages conveyed by key global entities, such as the International Monetary Fund and donor countries, to the world have helped emphasis Jordan’s achievements, she stressed.

On that, Finance Minister Ezzeddine Kanakrieh also said on Friday said that the soft loans facilitated to Jordan via the London initiative will not increase the Kingdom’s debt volume.

It will fund provisions of the general budget at low borrowing costs, hence not exceeding the debt volume outlined in the state budget law, he explained.

Kanakrieh added that these loans will help reduce the overall debt costs and lower the budget deficit, consequently lowering the state’s public debt volume, Petra reported.