Banking on Development

The regional head of the European Bank for Reconstruction and Development, Heike Harmgart, explains why the EBRD has pledged to invest 1 billion euros in infrastructure projects in Jordan.

The European Bank for Reconstruction and Development (EBRD) held its first annual meeting in the region in Jordan this month, which attracted over 2,500 participants from 68 countries. The meeting saw the signing of several development MoUs worth billions of euros between the bank and the Jordanian government.

In an interview with Venture following the meeting, Harmgart, the EBRD’s director for the Eastern Mediterranean Region, laid out how these major agreements will help the Kingdom’s development.

How important was this conference to Jordan’s development?

We signed a lot of critical deals. We signed a huge investment roadmap with Jordan of new projects worth 2.6 billion euros in the presence of the Prime Minister, including 1 billion from us for these projects. These are projects that have already been in preparation and passed the first stage of due diligence that we want to actually design and disperse over the next three to five years. They are in the wastewater management sector, urban transport buses in smaller cities, hospital management, and new schools. It’s a huge range of projects and most of them are public private partnerships. For us, we believe in the future of Jordan. This is why we put a lot of our own resources on the table for these projects.

How did you decide where this money would be dispersed and which projects were most important for the Kingdom?

They have been identified as priority projects by the ministries. For example, we have been working with the Ministry of Transport for a year and did a feasibility study on urban buses in Madaba, Salt, Zarqa and Irbid and now are on the second phase of designing the bus routes. So, these are on different stages of development and we designed these priorities together with the different ministries. The Ministry of Education will be working on PPPs for schools and they gave us their priority areas where they need new schools. As for wastewater, there’s a need for expansion of the wastewater treatment plant. We also suggested projects that may be a little more political including, for example, the Red-Dead conveyance. We put it in because we have been working on a lot of due diligence on it and we would like to support it. Of course, it’s a political decision whether it goes ahead or not but so far, the ministry of water was interested in making it happen.

How will you support the Red-Dead project in particular?

There will be 200 million from our side and we have done a lot of work trying to understand who are the five final companies who have been prequalified to understand the technical requirements and also to bring together all lenders. Together, the EBRD, the IRC, and the French Development Agency will come up with the $1 billion financing package. We are happy to facilitate and also coordinate all the lenders but of course now the ball is in the Jordanian court. The next phase would be launching the RFP. We hope that this happens this year so we can move to the next phase but this is a political move forward. Desalination, for example, makes so much sense for Jordan. So, we also have expressed interest in that.

Jordan also has another major political and economic crisis related to thousands of refugees. Were there any agreements regarding refugees and developing the areas where they live in the Kingdom?
We signed two agreements related to refugees and the host communities. One was with the EU whereby we signed a 20 million euro grant agreement that would benefit west Irbid wastewater networks and actually connect 25 villages to a wastewater network, allowing over 100,000 people to have the connection for the first time. We already signed the financing package at the end of last year but we have applied to make it more affordable for the Jordanian government for grants. This was signed with the EU ambassador at the end of the meeting. We were also working with the Greater Amman Municipality on waste management and signed another total package of JD23 million of new machinery for the waste sector where waste has grown exponentially in Al Ghawabi landfill as a consequence of the increase in the refugee population. So, these were two very concrete examples of our support for refugees and host communities at the annual meeting.

You’ve been here since the launch of the EBRD operations in the Kingdom more than five years ago. What do you think are the most pressing challenges facing Jordan today?

I think the biggest challenge is to create growth while also creating jobs. I think three years ago the energy challenge was the most pressing but Jordan made a lot of progress with renewables. Now young people are seeking jobs and unemployment is rising so I think the biggest challenge today is creating growth and jobs for young people. So, I think that’s what we are trying to do by investing in the Abdali mall’s training center that has already trained 400