Japan disburses second $100m loan tranche to bolster Kingdom’s reform efforts

AMMAN — The government of Japan, represented by the Japan International Cooperation Agency (JICA), disbursed $100 million on Monday to Jordan, representing the second tranche of the loan titled “Business Environment, Employment and Fiscal Sustainability Reform Development Policy Loan”.

This disbursal followed the Jordanian government’s fulfillment of all prior actions required for disbursing this batch of its ongoing development policy loan with JICA, according to a statement by the agency.

These prior actions aimed to support a reduction in the costs related to government procedures and to advance trade and promotion of small- and medium-sized enterprises (SMEs), the statement said.

For the employment sector, the reform supports the enhancement of career education for youth, the introduction of part-time work and the simplification of work permit procedures for women and foreign workers. It also addresses fiscal policy reform, the major focus being the promotion of public-private partnerships and the appropriate management of public investments.

The disbursement of the second tranche at this time is “critical for Jordan especially as it comes during  the current difficult global economic challenges”, the statement read.

The loan “evinces the confidence” of Japan and the donor community in the Jordanian government’s reform efforts to realise growth and overcome fiscal challenges, especially after the recent IMF board approval for the $1.3 billion Extended Fund Facility (EFF) programme with Jordan, noted the statement.

The $300 million loan agreement was signed in late November 2018 during His Majesty King Abdullah’s visit to Japan. The first tranche, amounting to $100 million, was disbursed in May 2019 upon the Jordanian government’s fulfillment of the relevant prior actions, according to the statement.

The loan conditions are soft, involving a 25-year repayment period — during which the first seven years are considered grace period — and very low interest rate. The loan is part of a series of soft development policy loans from Japan to Jordan that started in 2012, and thus far has accumulated to more than $1 billion, the statement said.