Unlike many of its Middle Eastern neighbors, Jordan is not blessed with copious oil and gas resources. In an already fragile region, subject to the whims of the international oil market and regional unrest, Jordan relies on fossil fuel imports to meet around 95 percent of its energy demand. Not only is this geopolitically ill-advised, it is also economically detrimental: these imports account for 40 percent of the country’s budget. For instance, the Arab Gas Pipeline, which runs through Jordan from Egypt and is a principal source of Jordanian natural gas, has suffered severely from uprisings in the Sinai Peninsula and Syria over the last couple years.
Insert renewables. Late last year Jordan’s energy minister announced that several renewable energy projects with a total capacity of 1,800 megawatts will be connected to the national power grid by the end of 2018. Made up of large-scale wind and solar projects — including 12 power purchase agreements to develop solar projects with a total capacity of 200 megawatts — the country is now turning to distributed solar. And its first targets are the thousands of mosques scattered across the sun-drenched landscape.
Ahmad Abu Saa, a representative of the renewable energy department at the Ministry of Energy and Mineral Resources in Jordan, told the Jordan Times this week that a new project to be implemented this year aims to install photovoltaic solar systems on all of the country’s 6,000 mosques. The project will start by covering 120 mosques.
“Mosques use large amounts of electricity and the project will help to significantly reduce their electricity bills as around 300 days in the year are sunny,” Abu Saa said. Jordan spends about $70 million annually constructing some 150 mosques, maintaining the existing ones, paying the salaries of imams and preachers, and covering water and electricity bills. Mosques will also be able to sell surplus power back to the country’s main grid after solar-friendly net metering laws were introduced in Jordan in 2012.
Jordan’s National Electric Power Company has sustained major financial losses of late and these renewable projects are meant to reduce the financial burden on the struggling utility. Jordan has a target of getting at least 10 percent of its energy from renewable sources by 2020.
With a population growth rate of nearly eight percent, this country of six million is in need of more reliable and affordable energy sources for every sector of the economy, not just mosques. The electricity sector in Jordan is expected to need an additional 1,500 megawatts of capacity by 2020, or 40 percent of the currently available power supply of about 3.4 gigawatts.
Whether 1,800 or 1,500 megawatts by 2020, the growth rate of renewables in Jordan depends in large part on the available financing. As New York-based international law firm Chadbourne reports, “for the time being, the main sources of financing for Jordanian renewable energy projects will probably be multilaterals, export credit agencies and other agency lenders. Financings led by international commercial lenders without any form of government credit support would seem challenging, and capacity constraints on long-term debt financings restrict reliance on local commercial lenders.”
For instance, the 117-megawatt Tafila wind farm in Jordan, the first of its kind for the country, received around $221 million in loans from the International Finance Corporation, the World Bank’s investment institution in the private sector. The European Investment Bank, the Eksport Kredit Fonden, the OPEC Fund for International Development (OFID), the Europe Arab Bank and the Capital Bank of Jordan also helped finance the project.