AQABA-AMMAN WATER DESALINATION & CONVEYANCE

Promoter – Financial Intermediary

MINISTRY OF WATER AND IRRIGATION - HASHEMITE KINGDOM OF JORDAN,SPECIAL PURPOSE ENTITY(IES)/FUND

Location

• Jordan

Description

The primary objective of the project is to provide 300 million cubic metres (MCM) of potable water to Amman and other governorates in Jordan and, possibly, to areas along the project pipelines route. The water will come from a seawater reverse osmosis plant south of Aqaba and will be conveyed to Amman via a new, approximately 420 km long water conveyor that would run for most of its part parallel to the existing Disi Conveyor.

Additionality and Impact

The AAWDCP is the largest water generation scheme to be implemented in the history of Jordan. It will generate from the outset 300 MCM per year of water and will be implemented through a build-operate[1]transfer (BOT) scheme. The project will close a supply-demand gap that is growing over time as a result of climate change. The project thus contributes significantly to the objectives of Jordan's National Water Strategy, the EU Joint Communication on Renewed Partnership with the Southern Neighbourhood, and the EIB Climate Bank Roadmap and Adaptation Plan. The benefits of the project include increased availability of water for domestic, municipal and industrial uses. The project also helps mitigate market failures by financing critical water supply infrastructure that generates positive externalities, mainly (i) security of supply in a wider geographic context with very scarce water resources, allowing for stable and prosperous social and economic livelihoods and (ii) environmental benefits by relieving further over-exploitation of groundwater resources. EIB's financial and non-financial contribution to the project is excellent. The Bank, alongside numerous development partners, is providing a substantial and favourable financing package, consisting of sovereign lending, project finance, and the management of an investment grant from the EU. In addition, the Bank has been involved from the very beginning of the project and provided technical expertise in the origination and structuring of the project, primarily through the ESIA, which establishes environmental and social standards in line with international best practices and which was funded and managed by EIB.

Objectives

Jordan has one of the lowest levels of water availability per capita in the world, which is anticipated to decline even more over the next years. This is due to an increase in population (expected to increase by 2047 from the current estimated 10 million to 18 million inhabitants) and the consequences of climate change in the country. In that context, the AAWDCP is expected to contribute to the following objectives: (i) increase the resilience of the water supply by substantially increasing water production by providing up to additional 300 million cubic metres of water per year to Amman; (ii) adapt to and potentially mitigate the impacts of climate change; and (iii) create jobs both during construction and operation. The project is a high priority for the Government of Jordan and supports the EU and EIB objectives in the country. Specifically it is in line with: - National priorities, in particular the National Water Strategy 2016-2025, which identifies projects that contribute to a resilient water sector as a key priority for concessional financing. - EU policy objectives, as the project is included among the flagship initiatives identified in the EU Joint Communication on Renewed Partnership with the Southern Neighbourhood, published in February 2021. - The EIB's objectives under the Neighbourhood, Development and International Cooperation Instrument (NDICI), specifically the development of social and economic infrastructure, as well as the Bank's Water Sector Lending Orientation, Adaptation Plan and Climate Bank Roadmap. - Sustainable Development Goal #6, which calls for ensuring availability and sustainable management of water and sanitation for all, and #11 (make cities and human settlements inclusive, safe, resilient and sustainable).

Sector(s)

• Water, sewerage - Water supply; sewerage, waste management and remediation activities

Under Global Europe NDICI guarantee

Under EFSD+ Guarantee

Proposed EIB finance (Approximate amount)

USD 606 million (EUR 601 million)

Total cost (Approximate amount)

USD 2700 million (EUR 2682 million)

Environmental aspects

A full Environmental and Social Impact Assessment (ESIA) has been completed with funding from the EIB and in line with international best practices and EIB environmental and social standards. The ESIA has also been approved by the relevant Jordanian authorities.

Procurement

The Bank will require the Promoter to ensure that implementation of the project will be done in accordance with the Bank's Guide to Procurement.

Status

Signed - 8/12/2022