IFC Extends Support for Jordan Renewable Energy with Financing for FRV Solar Plant
IFC, a member of the World Bank Group, has arranged a $76 million financing package for Fotowatio Renewable Ventures (FRV) to build a new 50 megawatt solar photovoltaic (PV) power plant in northern Jordan, the latest in a series of efforts to boost renewable energy investments in the oil-importing country.
The financing package, which includes $21 million from the IFC-Canada Climate Change Program, will support the construction of FRV’s first solar power plant in the city of Mafraq. FRV, part of Abdul Latif Jameel Energy, is a leading global developer of large-scale solar power plants. The new plant will supply power at 6.9 cents per kilowatt-hour – a price far below Jordan’s average cost of electricity and among the lowest for solar energy worldwide.
The plant, which is due to start operating in 2018, represents approximately 1 percent of Jordan’s overall generation capacity and will supply about 155 million kilowatt hours of electricity per year, sufficient to power over 40,000 average homes. It is also expected to create about 250 jobs during the construction phase and help reduce the carbon footprint by displacing over 80,000 metric tons of CO2 per year, equivalent to removing approximately 17,000 cars from the country’s roads.
“In Jordan, the demand for power is growing rapidly,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. “Privately-owned power companies, with their expertise and financial clout, have a vital role to play in bringing new generation capacity online at a lower cost which in turn will help the government to provide Jordan’s economy with the energy it needs to grow.”
The Mafraq plant is the first PV solar plant to be financed out of the four planned under the Jordanian government’s second round of solar PV projects.
“This is our first plant in Jordan and the country has tremendous potential when it comes to renewable energy,” said Tristán Higuero, COO from FRV. “By tapping into the power of the sun, we can help provide the country with affordable, clean energy and support a green growth path.”
The investment is part of a much larger IFC program to help Jordan transform its power generation base. In November 2013, IFC closed financing for the first commercial-scale renewable energy project, the 117-megawatt Tafila wind farm. IFC followed this in 2014 with the financing of the Jordanian government’s first seven solar PV plants; the largest-ever private sector-led solar project in the MENA region, which offered simplified, inexpensive financing to participating developers. IFC’s innovative program won Infrastructure Journal’s prestigious Middle East Renewable Dear of the year award and serves as the basis for FRV’s financing.
In addition to the $76 million from IFC and the government of Canada, IFC also mobilized financing for FRV’s solar plant from other investors, including $12 million from the Dutch development bank FMO, $8 million from Europe Arab Bank (EAB), and $5 million from the Finnish development financier FinnFund. The IFC-Canada Climate Change Program also contributed $2.4 million in a C-loan.
“The government of Canada’s investment in Jordan is helping them reduce greenhouse gas emissions and support their transition to a cleaner and greener future. Growing renewable energy production, like solar power, is part of an effective strategy to address climate change,” said Catherine McKenna, Canadian Minister of Environment and Climate Change.