EIB Confirms €400 Million Loan to Strengthen Water Security in Jordan

The loan agreement was signed in Brussels by Jordanian Minister of Planning and International Cooperation Zeina Toukan and EIB Director Lionel Rapaille.

In a landmark move to improve water security in Jordan, the European Investment Bank (EIB) has confirmed its largest water financing project outside Europe, signing a €400 million loan agreement with the Jordanian government. The 30-year loan, backed by a European Union guarantee, aims to enhance water availability, security, and sustainability across the country, increasing access to water supply, improving sanitation, and reducing water losses.

Key Figures and Event:

The loan agreement was signed in Brussels by Jordanian Minister of Planning and International Cooperation Zeina Toukan and EIB Director Lionel Rapaille. The signing was witnessed by Pierre-Christophe Chatzisavas, EU Ambassador to Jordan, and Francisco Gaztelu Mezquiriz, European Commission Director for southern neighbourhood policy. The event coincided with the 15th meeting of the EU-Jordan Association Council.

Significance and Objectives:

This new financing represents a significant step in addressing Jordan's water management challenges. Notably, it is the EIB’s first financing worldwide to use a results-based approach, where disbursements are tied to achieving specific policy and impact objectives. This innovative method is expected to enhance the focus on outcomes and efficiency of the investment.

Zeina Toukan, Minister of Planning and International Cooperation of Jordan, emphasized the importance of this investment: "The EIB’s latest backing for water investment will strengthen water security across Jordan and help to deliver our national water strategy goals. Improving water security, increasing water supply and expanding sanitation will benefit people across Jordan, enhancing both public health and tackling the impact of climate change."

EIB’s Commitment:

EIB Vice-President Gelsomina Vigliotti highlighted the bank’s commitment to supporting climate resilience and sustainable development: "The new €400 million water security loan for investment will strengthen water security across Jordan in the years to come and demonstrate how the Team Europe initiative is backing climate adaptation."

EU’s Role and Perspective:

European Commissioner for Neighbourhood and Enlargement Olivér Várhelyi noted the broader significance of the loan in the context of EU-Jordan cooperation: "This €400 million loan, in conjunction with the EU-supported Aqaba-Amman Water Desalination and Conveyance project, is a tangible example of our commitment to action. These initiatives are set to directly benefit Jordan and its people, offering a more sustainable and secure water flow and usage in the country."

Implementation and Scope:

The loan will support small-scale water projects across Jordan under the Ministry of Water and Irrigation's authority. The Water Authority of Jordan, Miyahuna Water Company, Aqaba Water Company, and Yarmouk Water Company will implement these projects in Amman, southern, and northern regions of the country. The investment focuses on updating water infrastructure to adapt to climate change, securing water supply for a growing population, and enhancing sanitation services.

International Support and Cooperation:

The €400 million loan will benefit from risk coverage by the European Union through the European Fund for Sustainable Development (EFSD+) and will be supported by a USD 54.36 million grant from the Global Concessional Financing Facility (GCFF). The GCFF was established to support countries hosting large numbers of refugees by providing concessional financing.

Historical Context and Future Outlook:

This investment marks a milestone in securing Jordan’s water future. By addressing critical issues in water supply, reducing non-revenue water losses, and improving sanitation, the project aims to build a more resilient and sustainable Jordan for generations to come. Since 1984, the EIB has provided over €1.5 billion for water investments in Jordan, demonstrating a long-standing commitment to the country’s development.

This new loan underlines the collective effort of international partners, including USAID, the French Development Agency, and the World Bank, to support Jordan’s National Water Strategy and enhance the region’s overall water security.