World Bank approves $85 million for Jordan’s Industry Development Fund to promote investments, exports

AMMAN —  The World Bank has approved $85 million in financing for the Jordan Support for Industry Development Fund Project, which aims to promote investments and exports in the manufacturing sector through the operationalisation of a new Industry Development Fund. 

The fund is one of the commitments Jordan has made under its Economic Priority Plan 2021–2023, according to a World Bank statement.

Jordan urgently needs to create inclusive and broad-based job opportunities to promote resilient recovery from the COVID-19 crisis, requiring a shift towards a resource-efficient, export- and investment-driven growth model, read the statement. 

Manufacturing, among the largest employers in Jordan’s economy, suffered acute shortages of cash during the COVID-19 pandemic. To diversify and expand their exports, and generate more jobs, companies now need to move out of survival mode to a new level of competitiveness, the statement said.  

The Government of Jordan is establishing the Industry Development Fund to put its development policies and programmes on manufacturing into practice. The government asked for the World Bank’s support in designing and operationalising the fund as “an efficient, transparent, and effective delivery platform for support for firms, and as a key financial enabler for industrial transformation”. 

Its focus will be upgrading and modernising industries; export development and promotion; and incentivising companies towards high performance in areas critical to the sector reaching its full potential, such as increased climate-responsiveness and female employment.  

"The Industry Development Fund is a key instrument in our Economic Priority Plan 2021–2023 to help firms in the industrial sector recover and build back better following the COVID-19 crisis,” Minister of Planning and International Cooperation Nasser Shraideh said in the statement. 

“It will serve as a stimulus to promote private sector-led investment, as well as modernisation, upgrading, and export development, which are key engines of growth for the Jordanian economy,” the minister added.

The project aims to support more than 500 export-oriented firms directly through the fund’s programmes and to mobilise at least $17 million in additional private capital. 

It will also support the building of effective delivery mechanisms and a robust governance and operational capacity, enabling the fund to support the transformation of the industrial sector in the longer term, according to the statement.

"Jordan’s recovery from the COVID-19 pandemic has been broad-based, but many sub-sectors are operating below their pre-pandemic level and external shocks have led to higher unemployment, especially for women and the youth,” said Saroj Kumar Jha, Mashreq Regional Director, World Bank Group, in the statement.

“This project will complement the integrated package of support for private sector development that the Bank and the Government of Jordan are implementing to foster enhanced public-private partnerships for inclusive and resilient recovery and growth,” he added. 

The main activities financed by the Fund will include: (i) Industry upgrading and export development programmes; (ii) Outcome-based incentives programme; and (iii) Easing access to export credit insurance and to new supply chain finance products.

The project prioritises gender balance and includes measures to ensure the inclusion of women business leaders/owners and employees, and of various vulnerable groups in the fund’s programmes, concluded the statement.