Banks agree to invest in Jordan Investment Fund

AMMAN — Local banks have agreed to buy stakes in the Jordan Investment Fund (JIF), which will be established and listed in the Amman Stock Market as a public shareholding company, a senior official announced.

The banks' decision came in response to the government's request of local financiers to contribute to the fund, according to Deputy Prime Minister for Economic Affairs and Minister of Industry, Trade and Supply Jawad Anani, who thanked the banks for their positive response, the Jordan News Agency, Petra, reported Monday. 

During a meeting with the chairpersons of the banks' boards of directors and heads of several blue chips on Monday, Anani said the contribution of the banks would serve national economy and generate revenues, especially since the projects on the drawing board are lucrative. 

For his part, Central Bank of Jordan (CBJ) Governor Ziad Fariz said that banks can increase their contribution as the CBJ’s rules allow banks to invest up to 10 per cent of their capital, adding that the current total investments of local banks in companies do not exceed JD430 million, although they have a margin of investment up to JD3 billion. 

President of the Association of Banks in Jordan Musa Shehadeh said that there is an initial agreement from the banks to contribute the needed percentage of the JIF Company’s capital, adding there is a possibility to increase the percentage in accordance with the projects to be announced and implemented later. 

The JIF aims at investing in national development projects based on profit to attract money need to implement mega projects in strategic sectors like transportation, energy, water and infrastructure. 

The JIF was initially established following an agreement to establish Saudi-Jordanian Coordination Council earlier this year, with reports of Saudi plans to invest billions in the fund, which is governed by a special law that offers privileges to investors.

The council has not met yet and the government of Hani Mulki launched a campaign to lure local investors to buy stakes in the company to be established, with focus on banks, where customer deposits are estimated at JD32 billion. 

The law stipulates that the fund’s board of directors is to be headed by the prime minister, with members including ministers of planning and international cooperation, finance, energy and industry, trade and supply, in addition to three members chosen by the Cabinet.

The fund has the right to possess, invest and develop the following projects: the national railway network, the electricity interconnectivity project with Saudi Arabia, the pipeline to transfer crude oil and fuel derivatives to the Jordan Petroleum Refinery Company, and consumption and storage points, developing infrastructure at the Custodian of the Two Holy Shrines City project and a recreational estate project in Matal in Aqaba, in addition to any other projects that the Cabinet approves, based on a recommendation from the fund’s board of directors.