Kingdom to receive JD82m soft loan from Japan

AMMAN – Japan will transfer JD82 million ($118 million) to the Kingdom’s Treasury before the end of this month in the form of a soft loan, officials from both countries said Monday. 

Minister of Planning and International Cooperation Ibrahim Saif told reporters after he signed the loan agreement with the charge d’affaires of Japan’s embassy in Amman, Masayuki Magoshi, that the low-cost loan will carry an interest rate of 1.7 per cent with a maturity period of 25 years and a grace period of seven years. 

The funds aim at supporting the state budget, which Magoshi said has been pressured by the influx of Syrian refugees.   

The fiscal consolidation and development policy loan from Japan comes just four days after the World Bank approved a $250 million loan to Jordan to support the budget. 

Saif indicated that the interest rate charged by World Bank loan is less than 1 per cent with a long-term maturity period of 25 years. 

“The stability of Jordan is critically important for the whole region.  Jordan has succeeded not only in maintaining its own stability, but also in making great contributions to regional stability, through its generous policy towards the influx of refugees, which is causing the Kingdom huge financial and social burdens, although Jordan itself is undertaking economic reforms,” the Japanese diplomat said.  

He said that the decision to extend the soft loan to Jordan for the budget support comes in recognition of the importance of Jordan’s stability and its role in the region. 

Saif said that the Japanese assistance would enable the government to implement its development plan for 2013-2016, indicating that over the past few weeks Japan has extended four grants to Jordan. 

The grants include $10.1 million to purchase machinery for the Ministry of Municipal Affairs, $6.7 million for establishing a museum in the ancient city of Petra, $24.5 million for the water sector in the northern region and $7.5 million for purchasing medical equipment. 

The minister described Japan as one of Jordan’s biggest donors. 

The government of Japan, in cooperation with Japan International Cooperation Agency, has provided Jordan with over JD2.6 billion in development assistance in various fields such as water, environment, health, education, vocational training and regional cooperation, since the establishment of the embassy of Japan in Jordan in 1974, according to embassy figures. 

Jordan and Japan will celebrate the 60th anniversary of establishing diplomatic relations between the two countries this year.