Financing from World Bank, partners ‘historic’ — Fakhoury

AMMAN – Minister of Planning and International Cooperation Imad Fakhoury on Monday described the financing facility for the region announced recently by the World Bank Group (WBG) as a “historical achievement” to Jordan.

The facility, he noted, was launched upon the request of the Kingdom “to create innovative funding tools” for middle-income countries that are not entitled to benefit from soft loans by the international financial organisation. 

In a statement e-mailed to The Jordan Times on Monday after he concluded a visit to Washington, DC, to take part in the Annual Spring Meetings of the International Monetary Fund/WBG, Fakhoury said the package is "extremely important to Jordan" as the soft loan tool targeting refugee host countries like Jordan and Lebanon entail mixing grants provided by donors and funding institutions with WBG lending that would slash interest rates almost to zero per cent along with long term maturity periods of up to 40 years.

The WBG on Friday announced that eight nations and the European Commission pledged a multimillion package in support of Syrian refugees and host communities in Jordan and Lebanon, as well as recovery and reconstruction across the region.

According to a statement e-mailed to The Jordan Times, the World Bank-led financing initiative includes $141 million in grants, $1 billion in soft loans and $500 million in guarantees. The statement added that the package means that the new facility will be able to generate up to $800 million in concessional loans next year.

The pledging, on the sidelines of the annual meeting, was made at a ministerial conference attended by Fakhoury and co-chaired by the chiefs of WBG, UN and the Islamic Development Bank (IDB). 

The minister said that Jordan is expected to be one of the first beneficiaries of this facility, as it has already started negotiations with the World Bank on proposals of projects eligible for financing from this soft financing, on top of which is the Programme for Results and the second Development Policy Programme loan.

Fakhoury said Jordan and the World Bank are currently working on a second development policy loan to reform water and energy sectors at a cost of $250 million, which will be secured as a soft loan to support the budget.

Jordan and the WBG are also working on another budgetary support programme named Programme for Results, valued at $300 million as a very soft loan instead of the short-term, high-cost commercial borrowing. A sum of $100 million will be provided to the Programme for Results by the International Development Agency, the WB announced in London conference in February of this year, the statement said. 

“Allocating this amount to Jordan is a precedent as Jordan is classified as a high-middle-income country,” Fakhoury said.

In addition to the meetings the minister held with top executives of IMF and WBG, he held a series of meetings with the US administration officials, USAID directors and members of the Congress to discuss future cooperation, according to the statement. 

He was also a main speaker at a session on Conflicts and Refugee Crises, organised by the IMF, whose managing director, Christine Lagarde,  also spoke at the session, the ministry’s statement said.