Jordan signs $300m loan agreement with World Bank

AMMAN — Jordan signed an agreement for a $300 million soft loan with the World Bank Group (WBG) during the annual meeting of the group and the International Monetary Fund in Washington last week.  

The loan’s soft financing conditions accord with the International Development Association's (IDA) terms, which are usually reserved for very poor countries and not, in principle, available to Jordan, a ministry statement said on Wednesday.

The loan will be paid back over 35 years.

Planning and International Cooperation Minister Imad Fakhoury and WBG Vice President for the Middle East and North Africa Hafez Ghanem signed the loan agreement.

Fakhoury expected the first payment to be disbursed within the next few weeks, with the remaining payments extended over a three-year period.

As for the sources of the loan, the minister said that the International Bank for Reconstruction and Development contributed $149 million, while $51 million was secured through a grant under a soft financing policy the WBG launched in response to Jordan's request in 2015 for lower interest rates on loans.

The remaining $100 million was a "very soft loan" announced by WBG President Jim Yong Kim in the London conference as an exceptional measure because Jordan is not qualified to benefit from IDA loans, Fakhoury said.

He added that the loan is aimed at covering the 2016 financial deficit, in a way that reduces the lending costs and contributes to restructuring debt burdens.

For his part, Ghanem stressed the WBG's commitment to supporting the international community's efforts to alleviate the burden Jordan is shouldering as a result of the Syrian crisis.

He also expressed the WBG's readiness to help the Kingdom in its endeavours to change this economic challenge into a development opportunity, especially by supporting priorities in the executive development programme for 2016-2018, the statement added.

Meanwhile, on the sidelines of his participation in the annual meetings, Fakhoury held talks with WBG and US officials about assistance to help Jordan deal with the repercussions of the Syrian crisis and the regional conditions.

The minister’s meetings with WBG officials tackled the 2017-2022 partnership framework, which the Bank recently endorsed and  which would provide the Kingdom with a financing ceiling of $1.4 billion.

He also met with officials from the International Finance Corporation (IFC), where he called for increasing support to enhance the public-private sector partnership.

The IFC’s investment volume in the Kingdom stands at around $1.3 billion, which is the corporation’s highest investment for such an economy size and population.

Separately, Fakhoury said on Wednesday that Jordan has been selected for the first time to head the councils of governors at the WBG and the IMF in 2017, the ministry added.