IFC, a member of the World Bank Group, has arranged a financing package of up to $188 million for the largest solar photovoltaic power plant in Jordan to date—the latest in a series of efforts to boost renewable energy investments in a country faced with increased energy demand, in part driven by the growing refugee crisis.
The financing package for the 248-megawatt Baynouna facility developed by Masdar, Abu Dhabi Future Energy Company, includes $54 million from IFC’s own account and $134 million mobilized from other senior lenders including a parallel loan from Japan International Cooperation Agency. This is the first time JICA has invested in a private project finance transaction in the region. Other lenders include Dutch Development bank FMO and Europe Arab Bank as B lenders and OFID, the OPEC Fund for International Development and German development bank DEG as parallel lenders.
“The diversity of financial institutions supporting Baynouna illustrates both IFC’s successful track record with the private sector in emerging markets over the last 60 years and the strength of its commitment to best practice,” said Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar. “With backing now secured from lenders in Asia, Europe and the Middle East, the significant global interest in commercial renewable energy in Jordan and the MENA region is clear.”
The new plant will supply power well below Jordan’s average cost of electricity, thus further lowering the cost of long-term electricity generation in the country.
“Renewable energy is a pillar of IFC's work, in the region and beyond. We have already financed several major projects, encouraging private investment in the sector and pioneering innovative financing models,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. "We stand ready to support Jordan in meeting its growing energy needs and becoming a model for renewable energy investments.”
So far, IFC has invested over $300 million in aggregate across 13 projects, enabling well over $1 billion in private sector investments in Jordan’s power distribution and generation sectors.
In 2013, IFC was the financial advisor and mandated lead arranger for Jordan’s first commercial-scale renewable energy project, the 117-megawatt Tafila wind farm. In 2014, IFC’s ground-breaking renewable energy finance program, Seven Sisters, aggregated seven independent projects to raise $210 million to support Jordan’s first round of solar PV projects, at the time, the largest private sector-led solar programme in MENA. In 2016, IFC closed financing for FRV’s first 50-megawatt Mafraq I Solar PV project, followed at the end of the year by the ACWA-sponsored 485-megawatt Zarqa combined cycle gas-fired thermal power project.