Luxembourg, 17 July 2024
- Largest ever EIB Global support for water investment outside Europe and first EIB results-based financing worldwide, backed by EU support
- New investment to improve water security, increase water supply and expand sanitation
- Finance contract agreed alongside EU-Jordan Association Council meeting
The European Investment Bank has confirmed its largest water financing in Jordan to improve water availability, security and sustainability across the country and increase access to water supply, improve sanitation and reduce water losses.
The €400 million 30-year loan, backed by a European Union guarantee, was signed in Brussels by Jordanian Minister of Planning and International Cooperation Zeina Toukan and EIB Director Lionel Rapaille.
Pierre-Christophe Chatzisavas, EU Ambassador to Jordan, and Francisco Gaztelu Mezquiriz, European Commission Director for southern neighbourhood policy, witnessed the event, which took place alongside the 15th meeting of the EU-Jordan Association Council this week.
The new loan represents both the largest EIB backing for water investment outside Europe, and the EIB’s first financing worldwide in which disbursements will be tied to the achievement of policy and impact objectives – a system known as results-based financing.
“The European Investment Bank is a key partner for priority investment in Jordan. The EIB’s latest backing for water investment will strengthen water security across Jordan and help to deliver our national water strategy goals. Improving water security, increasing water supply and expanding sanitation will benefit people across Jordan, enhancing both public health and tackling the impact of climate change.” said Zeina Toukan, Minister of Planning and International Cooperation of the Hashemite Kingdom of Jordan.
EIB Vice-President Gelsomina Vigliotti said the loan highlights the importance of helping countries that are particularly vulnerable to climate change, The financing is part of a pooled-resource system known as “Team Europe”, which brings EU and Member-State institutions.
“The European Investment Bank is committed to supporting climate resilience and sustainable development here in Jordan, one of the world’s most water-scarce countries. The new EUR 400 million water security loan for investment agreed today, our largest ever financing for water in Jordan, will strengthen water security across Jordan in the years to come and demonstrate how the Team Europe initiative is backing climate adaptation. Jordan is the first country worldwide to benefit from EIB’s results-based financing to strengthen impact and efficiency.” said Gelsomina Vigliotti, Vice President of the European Investment Bank.
European Commissioner for Neighbourhood and Enlargement Olivér Várhelyi said the EIB funding deepens EU-Jordan cooperation.
“With the signature of this EUR 400 million loan from the EIB to Jordan, we not only mark another step towards strengthening the partnership between the EU and Jordan but also underscore the significant role of this loan in addressing Jordan’s water management challenges, particularly in the face of water scarcity. This EUR 400 million loan, in conjunction with the EU-supported Aqaba-Amman Water Desalination and Conveyance project, is a tangible example of our commitment to action. These initiatives, part of the Economic and Investment Plan, are set to directly benefit Jordan and its people, offering a more sustainable and secure water flow and usage in the country” said Olivér Várhelyi, European Commissioner for Neighbourhood and Enlargement.
Implementation across Jordan is planned over the next five years and will support small-scale water projects under the authority of the Ministry of Water and Irrigation.
Supporting water investment across the country
Schemes will be implemented by the Water Authority of Jordan, Miyahuna Water Company, Aqaba Water Company and Yarmouk Water Company. Individual projects are expected to be located in Amman, the south of the country and northern regions.
Results-based financing to enhance impact
The results-based loan will disburse financing based on the achievement of policy and impact objectives. This will increase the new investment focus on outcomes and results, leverage technical cooperation and enhance cooperation between project and development partners.
Jordan and international partners tackling climate change
The €400 million EIB loan will benefit from risk coverage from the European Union through the European Fund for Sustainable Development (EFSD+) and be supported by USD 54.36 million grant financing from the Global Concessional Financing Facility (GCFF).
The GCFF was established in 2016 by Canada, Denmark, the European Commission, Germany, Japan, the Netherlands, Norway, Sweden, the United Kingdom, and the United States to provide concessional financing to support countries that provide a global public good by hosting large numbers of refugees.
The EIB financed water investment in Jordan, is part of the European Union Neighbourhood, Development and International Cooperation Instrument and will complement planned actions in the sector by a number of international development partners including USAID, the French Development Agency and the World Bank planned in the sector.
Supporting Jordan’s National Water Strategy
The new EIB loan will support the implementation of Jordan’s National Water Strategy, updating water infrastructure to adapt to climate change and securing water supply for a larger population.
The financing represents a milestone in the effort to secure Jordan’s water future. By addressing critical issues in water supply, reducing non-revenue water losses, and improving sanitation, this investment will help build a more resilient and sustainable Jordan for generations to come.
Including the new results-based water financing, the EIB has provided more than €1.5 billion for water investment across Jordan since 1984.
Background information
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
EIB Global is the EIB Group’s specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions, and civil society. EIB Global brings the Group closer to local people, companies and institutions through offices across the world.