Jordan receives first instalment of WB $1.45b loan

AMMAN — A $725-million instalment of the World Bank’s (WB) $1.45-billion loan to Jordan has been deposited at the Treasury’s account at the Central Bank of Jordan (CBJ), Minister of Planning and International Cooperation and State Minister for Economic Affairs Mohamad Al-Ississ announced on Tuesday. 

Earlier in June, the World Bank Group had agreed to provide Jordan with the loan at a 4 per cent interest rate and with a four-year grace period, according to the Jordan News Agency, Petra. 

The terms of the loan are concessional, and the maturity of the loan is for 34 years, according to the WB. 

The minister highlighted that the sum will be utilised to cover payments of a $1-billion Eurobond, due this month, according to Petra.

Sources from the Ministry of Planning and International Cooperation have revealed that the remaining amount of the Eurobond due payments will be covered through the issuance of local US-dollar bonds. 

The loan aims at mitigating current debts, the ministry said, noting that this lending alternative will save the government around $50 million, compared with the option of a Eurobond loan at an interest rate of 8-9 per cent, according to the ministry. 

The loan was approved under the banner of the Second Equitable Growth and Job Creation Development Policy Loan, which contributes through “far-reaching and progressive reforms to launching Jordan as a country open for business”, according to a WB statement issued earlier this month. 

The new package is designed to disburse in two equal tranches to support the government’s new economic plan for growth and to allow adequate time for the completion of necessary additional reforms that are central to the achievement of the programme’s overall results, according to the statement. 

The financing package will also “help Jordan stimulate inclusive growth and create more jobs for all”, the statement added.