News / IPPToday #135: Largest solar PV project in Jordan to receive IFC financing

IPPToday #135: Largest solar PV project in Jordan to receive IFC financing

🕔 January 17, 2018
IPPToday #265: Senvion signs up to 300 MW wind turbine agreement in Spain

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The International Finance Corporation (IFC) has announced that it has arranged a financing package of up to US$188 million for the 200 MW Baynouna plant, the largest solar photovoltaic (PV) power plant in Jordan to date.

The Baynouna solar energy project is currently being developed by Masdar (also known as Abu Dhabi Future Energy Company). As reported on this platform, Masdar signed a PPA for the project with Jordan’s state electricity provider, National Electric Power Company, in October 2016.

The 200 MW plant will be located east of the capital, Amman. It will be linked to the Al Muwaqqar substation, approximately 10km outside the city. Once operational, it will generate 563.3 GWh of electricity each year, equivalent to 3% of the annual energy consumption of Jordan. This will displace an estimated 360,000 tonnes of CO2.

The estimated total value of the project is US$260 million. The financing arranged by the IFC includes a US$54 million A loan and a total of US$134 million provided by a consortium of lenders, consisting of Japan International Cooperation Agency (JICA)Europe Arab Bank, Dutch development bank FMO, the OPEC Fund for International Development (OFID) and the German development bank DEG.

The parallel US$54 million loan provided by JICA marks the agency's first investment in a private project finance transaction in the Middle East and North Africa region (MENA). 

Construction was scheduled to begin in Q2 2017, and is expected to be complete in the Q1 2019.

The new plant will supply power well below Jordan’s average cost of electricity, significantly lowering the cost of long-term electricity generation in the country. 

Furthermore, the solar project will replace 1.4 billion litres of imported crude oil with clean energy, greatly increasing the country’s energy independence. Currently, Jordan imports around 96% of its energy at a cost equivalent to 20% of its national GDP.

This is the second renewable energy project that Masdar have sponsored in Jordan. The first - the 117MW Tafila wind farm - was inaugurated in December 2017. Masdar hold a 31% stake in the company that own the project. IFC was the financial advisor and mandated lead arranger for the wind farm, the first commercial-scale renewable energy project in Jordan.

The Baynouna plant and Tafila wind farm will contribute significantly to reaching the national goal of producing 15% of domestic electricity needs from renewable sources by 2020. Together, the two projects will account for nearly 18% of the 1.8 GW of renewable energy Jordan plans to install by 2020.

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