Jordan - Fourth Power Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3329-JO JORDAN FOURTH POWER PROJECT STAFF APPRAISAL REPORT April 10, 1981 Projects Department Europe, Middle East and North Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank autborization.  CURRENCY EQUIVALENTS Currency Unit = Jordan Dinars (JD) JD 1 1,000 fils JD 0.30 = US$1.00 JD 1.00 = US03.33" WEIGHTS AND MEASURES 1 meter (m) = 3.281 feet (ft) 1 kilometer = 0.621 mile 1 square kilometer (km2) = 0.386 square mile (mi2) 1 cubic meter (m3) = 35.315 cubic feet (ft3) 1 kilogram (kg) = 2.205 pounds (lb) 1 ton (1,000 kg) = 1.102 short ton (sh ton) 0.984 long ton (lg ton) 1 barrel (bbl; 0.159 m3) = 42 US gallons (gal) 1 kilowatt (kW) = 1,000 Watts 1 Megawatt (MW) = 1,000 kW 1 kilowatt hour (kWh) = 1,000 Watthours (Wh) 1 Gigawatt hour (GWh) = 1,000,000 kWh = 1,000 MWh (=106kWh) 1 kilovolt (kV) = 1,000 volts (V) 1 kilovolt ampere = 1,000 volt amperes (1 kVA) 1 Megavolt ampere = 1,000 kVA 1 kilocalorie (kcal) = 3.969 British thermal units (4.2 kilojoules) (Btu; 1 Btu = 0.293x10-3kWh) GLOSSARY OF ABBREVIATIONS IDECO - Irbid District Electricity Company JEA - Jordan Electricity Authority JEPCO - Jordanian Electric Power Company JPRC - Jordanian Petroleum Retinery Company JVA - Jordan Valley Authority K&D - Kennedy and Donkin LPG - Liquified Petroleum Gas LRAIC - Long Run Average Incremental Cost MIT - Ministry of Industry and Trade NEC - National Energy Council NPC - National Planning Council NRA - Natural Resources Authority PCR - Preece, Cardew and Rider RSS - Royal Scientific Society UK - United Kingdom mtoe - million tons of oil equivalent p.a. - per annum Financial Year = Calendar Year  FOR OFFICIAL USE ONLY JORDAN FOURTH POWER PROJECT Table of Contents Page No. I. THE POWER AND ENERGY SECTOR ...................... 1 A. The Energy Sector ........................... 1 Energy Resources ............................ 1 Organization and Institutions. 1 Energy Supply and Demand. 2 Energy Policy. 4 Energy Pricing ...... ........................ 5 B. The Power Subsector ............... 6 Organization. 6 The Jordan Electricity Authority (JEA) 7 The Jordanian Electric Power Company (JEPCO). 8 The Irbid District Electricity Company (IDECO). 9 Historical Development of the Power Subsector ..- ...................... 10 Development Program .11 Planning .12 Generation .12 Transmission Network .12 Distribution .13 Rural Electrification ... 13 Development Program Costs .14 Role of IDA/Bank .14 II. THE PROJECT ..15 Objectives .15 Description .15 Training Programs .16 Consultants Services .17 Project Cost Estimate .18 Project Financing Plan ........................... 19 The report was prepared by Messrs. V. Mastilovic'(Engineer), C.P. Ranganathan (Financial Analyst), I. Elwan (Economist) and T. Berrie (Consultant), This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Table of Contents (Continued) Page No. Implementation .............. 20 Procurement .......................... . 21 Disbursements ...,............. .. ....... 21 Environmental Aspects and Project Risks ....... 21 III. FINANCE ....................... 23 A. Jordan Electricity Authority ..O ... .. 23 Accounting ......... . 23 Revaluation of Assets ...,................. 23 Accounts Receivable ......................... 24 Past Performance and Present Position ....... 24 Financing Plan .............................. 24 Futur-e Financial Performance and Proposed Financial Covenant ......................... 26 Debt Service Coverage ....................... 28 Audit:ing ........ ............................ 28 Insurance ....... ............................ 28 B. Jordanian Electric Power Company ......... ... 29 Accounting ......... 29 Past Performance and Present Position ....... 29 Accounts Receivable . . ................. 30 Financing Plan ....... ....................... 30 Future Performance ...... .................... 31 Debt Service Coverage ..... .................. 32 Auditing . ................................... 32 Insur-ance ................................... 33 IV. PROJECT JJSTIFICATION ....................... 33 A. The Power Market Growth .... ................. 33 B. Comparison of Alternatives ......... ......... 34 C. Return on Investment ............ ............. 34 V. RECOMMENDATIONS ..................... . 36  Table of Contents (Continued) ANNEXES 1.1 - Jordan's Energy Consumption 1.2 - Electricity Tariffs in Jordan 1.3 - JEA Organizational Chart 1.4 - JEPCO Organizational Chart 1.5 - Generation, Consumption and Peak Loads (1971-1979) 1.6 - JEPCO and IDECO - Basic Statistical Data 1.7 - Access to Electricity Supply 1.8 - Generation Installed Capacity 1.9 - Forecast Energy Balances (Total Power System) 1.10 - Forecast Balances of Energy and Capacity (Interconnected System) 1.11 - Forecast of Sales for Consumer Categories 1.12 - JEA's Development Program Costs 1.13 JEPCO's Capital Expenditures Requirements 2.1 - Description of the Project 2.2 - Project Cost Estimate 2.3 - JEA's Project Implementation Schedule 2.4 - JEPCO's Project Implementation Schedule 2.5 - Estimated Schedule of Disbursement 3.1 - JEA's Actual, Estimated and Forecast Financial Statement for the Years 1977-85 3.2 - JEPCO's Actual and Forecast Financial Statements for the Years 1977-85 3.3 - Notes and Assumptions for Financial Forecasts 4.1 - Rate of Return on All Power Projects to be Commissioned During 1981-1985 "Time Slice" 5.1 - Selected Documents Available in the Project File MAP IBRD 15489R  I. THE POWER AND ENERGY SECTOR A. The Energy Sector Energy Resources 1.01 There are no known deposits of coal or lignite nor any proven reserves of oil or gas in Jordan. A small hydro potential is confined to about 2 MW (4 GWh p.a.) at the existing King Talal Dam on the River Zarqa, a possible 20 MW (50 GWh p.a.) at the future Maqarin Dam near the Syrian border, some micro-hydro projects using seasonal river flows, and development of a hydro link between the Red Sea and the Dead Sea (up to 300 GWh p.a.). Geothermal potential, which exists mostly in the north, has been investigated under the first phase of a UNDP study. The prospects for development do not look bright at present mainly due to the low temperature of the water. However, the volume of water is large and further studies may be worthwhile, e.g. additional shallow drilling to obtain further indications of temperature gradients or the drilling of a deeper hole to try to find hotter water. There are traces of uranium in most of the phosphate areas, although a recent scintillometer survey has not raised hopes very high. Any development of nuclear power is most likely to be for an international power grid. Tar sands exist near the Dead Sea. These might be eventually developed for use by small industries. Prospecting for oil and gas deposits is not at present being pursued with any vigor, following the lack of interest shown by expatriate institutions in taking up licenses for seismic studies in particular areas. 1.02 Undoubtedly the most promising known indigenous energy resources are oil shale and, to a lesser extent, solar energy. The present estimate places the amount of oil shale in Jordan at 10,000 million tons. Deposits have been examined most thoroughly in the area of Al-Lajjoun near El Hasa, where about 1,300 million tons have been proven, with a potential oil content of 65 to 70 liters per ton. There are two major options for using the oil shale; (i) grind it and use it like lignite in a boiler, probably in a power station, and (ii) extract the oil. Studies have been mounted on each of these possibilities, and are expected to be completed in about 15 to 18 months time. A Russian team is studying the first option for a 300 MW power station, possibly at Qatrana, and a German team is studying the second option. Major problems will be the heavy investment needed for any commercial project, the amount of water required and the volume of ash/slurry produced. The problem of large investment requirements will occur also with any direct use of solar energy for producing electricity via photovoltaic cells. Although solar energy is very plentiful in Jordan, its future usage is likely to be limited to water heating. Organization and Institutions 1.03 The major institutions directly involved in the energy sector are the Jordan Petroleum Refinery Company (JPRC), the Natural Resources Authority (NRA), the Jordan Electricity Authority (JEA) and the Royal  Scientific Society (RSS). JPRC, a semi-private organization in which the Government holds a majority of the shares, deals with the importation of crude oil, its processing, distributing and marketing. NRA is responsible for the exploration of non-renewable energy resources, e.g. oii, gas, oil shale and tar sancds. JEA and other organizations dealing with power generation and supply are described below (paras. 1.14-1.24). Basic and applied research on the existing and potential sources of renewable energy, e.g. solar, wind and biomass, is usually carried out by RSS. These institutions report to the Council of Ministers, which is advised by the National Energy Council (NEC) consisting of representatives of the institutions mentioned above and other organizations and agencies dealing with the energy sector. NEC has not been very active; it has no permanent professional stafE, no financial means to commission necessary studies on important energy sector issues, and experiences difficulties in arranging meetings of its aLready very busy members. To improve the coordination of the activities of the energy-related institutions, the Energy Department in the Ministry of Industry and Trade (MIT) was created in late 1979. This department, composed of a small professional staff and headed by a capable director, has just begun to function. It needs to be strengthened to develop adequate energy planning capabilities and to improve coordination among energy-related institutions, particularly in connection with the development of indigenous energy resources. The Government has agreed to submit by June 30, 1982 to the Bank for its review and comments a plan for (i) strengthening the planning and management of the energy sector, and (ii) improving the coordination among the energy-related institutions in Jordan. Energy Supply and Demand 1.04 Jordan is at present totally dependent on imported crude oil for meeting its energ-y sector demand. The crude oil is imported from Saudi Arabia via Trans-Arabian pipeline which crosses Jordan. Jordan also imports very small quantitites of petroleum products, mostly lubricants and some LPG. Virtually all petroleum products consumed are produced domestically at a refinery operated by JPRC. The refinery has a capacity of 12,000 tons a day. The petroleum products are transported by road, with the exception of the requirements of the power plant at Zarqa, which is supplied directly from the refinery by a special pipeline. The costs of imported crude oil in Jordan have risen from US$6 million (about 1% of gross national income) in 1970 to an expected US$360 million in 1980, about 12% of gross national income and an intolerable 154% of country's exports. To rectify within a reasonably short time the disadvantages of having a single energy source, crude oil, imported and processed at only one location, Jordan plans to examine the overall advantages and disadvantages of importing another fuel. The studies being carried out on the proposed large thermal power station at Aqaba cover these points and their terms of reference include consideration of the use of coal as a fuel instead of fuel oil. 1.05 Despite the very large increase in oil prices, energy consumption in Jordan has increased over the last ten years from 0.45 million tons of  oil equivalent (mtoe) in 1970 to 1.6 mtoe in 1979, an average annual increase of about 15% (Annex 1.1). The estimate for 1980 was 1.84 mtoe, an increase of about 15% over 1979. Energy consumption per capita has increased from 286 to 730 kilograms of oil equivalent p.a. within the ten-year period (1970-79), compared with a current overall world figure of about 2,000 kilograms of oil equivalent per capita, and about 600 for all developing countries. In 1979 the transportation sector accounted for about 50% of the total fuel consumption in Jordan, industry and domestic 15% each, electricity 14% and other non-major consumers 6%. Jordanian forecasts show crude oil requirements at about 2.75 million tons in 1985 (10% p.a. increase since 1979) and about 3.70 million tons in 1990 (6% p.a. increase after 1985). These forecasts do not include the future requirements of the new Aqaba steam power station which are estimated at 0.25 million tons in 1986 and 1.03 million tons in 1990. The impact of burning fuel oil at the Aqaba steam power station could substantially alter the projections and unbalance the presently planned products mix at the refinery. 1.06 The Jordan national energy balance in 1979 is summarized as follows: in thousand toe SUPPLY Imports Crude Oil 1,720 LPG 5 Lub Oil 1 Electricity 1/ 2 Less Losses and Increase in Stock Refinery losses and fuel (121) Increase in Stock (32) Total Supply 1,575 DEMAND Petroleum Products 2/ LPG 45 Gasoline 274 Army Gasoline 16 Aviation Fuel 172 Kerosene 153 Gas Oil/Diesel 383 Heavy Fuel Oil 191 Others 90 Electricity 251 Total Demand 1,575 1/ 8 GWh converted at 0.29 toe/1,000 kWh. 2/ Excludes fuel for electricity generation.  -4- 1.07 Jordan's energy sector suffers from the absence of an integrated plan for the development of its energy resources. Work has been initiated in several areas and the institutions responsible for implementing this work are, in most cases, technically capable and administratively efficient, but coordination among them needs improvement. The development of Jordan's energy sector has to be viewed with respect to two time horizons; the short run covering a period of about five years or less, and the long run involving a period longer than five years. In the short run, the only option available to the Government lies in improving the efficiency by which imported energy is being utilized. In the long run, the Government would focus on the exploration for indigenous energy resources and development of the technology rfor the use of these resources. The short run strategy for the development of Jordan's energy sector would include: (i) the strengthening of the capabilities for energy planning; (ii) the improvement of the policies for the managernent of the demand for energy; and (iii) the formulation of a long term program aimed at the exploitation of Jordan's domestic energy resources. The strengthening of the Energy Department at MIT would enable it to take full responsibilities for all the aspects relating to the planning and management of the energy sector (para. 1.03). Demand management would involve the fornmulation of policies for the rationalization of energy prices, and programs for energy saving consisting of energy audits, interfuel substitution, cogeneration and waste heat recovery. The formulation of a program for the exploitation of Jordan's domestic energy resources would involve assessing the optimal uses for the existing resources and the exploration for new potential sources of energy. 1.08 In order to address the above matters the Energy Department at MIT has recently been active in drawing up terms of reference for consultants ser- vices, the objective of which is to assist the Government in creating a country energy policy, improving demand management and developing indigenous energy resources. The Government is anxious that the Bank takes an active role in technical assistance to the Jordanian energy sector. The proposed Project provides for energy consultants services to the Government and its Energy Department at MIT in connection with the energy sector development strategy and pricing policy (para. 2.02). The next major power project (the Aqaba steam power plant), which is included in the Bank's FY83 lending program to Jordan, would enable the Bank to assist the Government in further energy sector improvements. The Government has agreed to employ by December 31, 1981 oualified energy consultants to assist the Government in decision-making on energy pricing, demand management, energy conservation and strategy for indigenous resources development. Jordanian energy-related authorities and institutions would be adequately involved in this work. The Government would furnish to the Bank by December 31, 1982 a timetable, satisfactory to the Bank, of actions to be undertaken to implement such recommendations of the energy consultants as are appropriate.  -5- Energy Pricing 1.09 The prices of petroleum products are set by the Government. Their level is revised periodically as the cost to the Government of importing crude oil increases. The Government subsidizes the prices of all petroleum products with the exception of gasoline and LPG which are taxed. The Government's policy of subsidizing the prices of petroleum products is aimed at dampening the effects of the increased prices of imported crude oil from being reflected in the general price level. The subsidy for kerosene and gas oil/diesel used by the residential consumers for household purposes such as cooking and space heating stems from the Government's desire to provide these fuels at prices that are affordable by the low income urban or rural consumers. The burden of the subsidy for petroleum products has been increasing ever since 1973 when the first significant change in the price of crude oil took place. By 1978, the total burden of the subsidy for the domestic consumption of petroleum products reached US$65.0 million which represented 42% of the total oil import bill for that year. In early 1979, the Government decided to reduce the subsidy for petroleum products, and since then, the domestic prices were increased four times (in March and July of 1979, February 1980 and February 1981). Table 1 below summarizes the relationship of the domestic and border prices for petroleum products after the increase of February 1980 (the prices after the increase of February 1981 are not available). Table 1 RELATIONSHIP OF DOMESTIC AND BORDER PRICES FOR PETROLEUM PRODUCTS (End 1980) US$/ton Domestic Price Border Domestic Tax or as % of Product Price Price (Subsidy) Border Price LPG 355 417 62 117 Gasoline 337 676 339 201 Aviation Fuel 317 165 (152) 52 Kerosene 307 163 (144) 53 Gas/Diesel Oil 280 134 (146) 48 Fuel Oil 182 100 (82) 55 1.10 As a result of the increases in the domestic prices of petroleum products in 1979, the subsidy was reduced to 39% of the oil import bill for that year (US$89 million compared to US$244 million). For 1980, the subsidy was expected to be further reduced to about 26% of the oil import bill. For 1981, the level of the subsidy would change because of the increase in the import price of oil since December 1980 and the increase in the domestic prices of petroleum products in February 1981. The exact level of the subsidy expected in 1981 is however not known.  - 6- 1.11 JEA serves as a regulatory body of the Government for electricity rates that may be set by the investor-owred power supply utilities such as the Jordanian Electric Power Company (JEPCO) and the Irbid District Electricity Company (IDECO) as well as for rates applied to JEA's direct cnnsumers. JEA's tariffs for the bulk supply of electricity consist of a maximum demand charge (JD 2.4/kW per month) and kWh charges for daytime use and off-peak consumption. Consumers are required to maintain the power factor at their installations at not less than 0.85. In case of any decrease in the power factor below 0.85, the consumer has to pay, in addition to his electricity bill, a penalty specified in the electricity tariffs. JEA has the right not to supply any consumer if his low power factor affects the system and he takes no action to improve the power factor. By virtue of the General Elec-ricity Law (1976) the retail tariffs for electricity supplied by JEA and power companies in their concession areas consist of domestic, commercial, small and large industries rates, together with a maximum demand charge, and daily and nightly kWh charges. Special tariffs apply for electricity consumed in water pumping for irrigation and drinking as well as for lighting streets and public areas. Places of worship, schools, hospitals and charities are granted a reduction of 25% of their electricity bills. There is a charge of 1 fil per kWh on all retail electricity sales by JEA and the concession companies to finance rural electrification through a special rural electrification fund. 1.12 The exist:ing tariffs, which were introduced on March 6, 1980, are summarized in Annex 1.2. In order to reduce subsidies and to reflect directly the costs to the economy of meeting electricity supply requirements, the Government increaed the rates about 70%. The new rates are among the highest in the region for some categories of electricity consumption; e.g., the commercial rate for daytime use is 57 fils/kWh (US$0.19/kWh), while comparable rates are in Israel 20 fils/kWh and Cyprus 27 fils/kWh. At the beginning many customers objectecl or complained about the new tariff rates but now the situation appears to be reasonably settled. The electricity tariff structure is based on consultants' studies under the two Credits granted to the Government of Jordan for power projects. A fuel adjustment clause is incorporated in the tariffs. Each 100 fils increase in the cost above JD 30/t for fuel oil and JD 42/t for diesel oil wil result in electricity rates increase by 0.041 fils/kWh. JEA's long run average incremental cost (LRAIC) for sales to JEPCO and IDECO is about 25.7 fils/kWh and for sale to the large industrial consumers is about 30.9 fils/kWh. Both rates are fairly close to JEA's average prevailing tariffs for sale to these consumers. JEA's tariff for sale to the low voltage consumers is about 41 fils/kWh which is higher than the average LRAIC of supply of 33.7 fils/kWh. JEPCO's and IDECO's average tariffs for sale to their low voltage consumers are also hnigher than the LRAIC. Theref'ore, from the resource allocation point of view, the average electricity tariff- in Jordan is in fact conveying to consumers the proper signals about the economic cost of the resources used in meeting their demand. B. The Power Subsector Organization 1.13 MIT controls the power and energy sector. The General Electricity Law, passed in 1976, defines the principles and basic regulations for the  -7- power subsector in Jordan and also specifies the procedure for tariff approval, granting licenses for power facilities, inspection of works and collection of statistical data. The main organizations involved in power generation, transmission and distribution are JEA, JEPCO and IDECO, Some large enterprises (phosphate, cement and refinery) have their own captive power plants. Several small towns and villages in the Central and Southern regions operate mobile diesel generators to supply mainly lighting loads. The Jordan Electricity Authority (JEA) 1.14 JEA is a Government-owned utility established by Law No. 21 1/ in 1967 to foster the coordinated development of the country's power sub- sector. According to the General Electricity Law, the main responsibilities of JEA are: to prepare plans and programs for the electrification of Jordan; to construct power facilities; to carry out rural electrification; to manage the Rural Electrification Fund; to generate, transport and distribute electricity directly or through independent distribution companies (JEPCO and IDECO); and to regulate power consumption in the country. JEA is also authorized to manufacture electrical and other equipment needed for the power system. The law provides that JEA should be both financially and administra- tively independent. JEA has a board of eight directors appointed by the Government. The Minister of Industry and Trade is the Chairman of the Board and the Director General of JEA is an ex-officio member of the Board. Although a rather new and rapidly growing institution, JEA has already proven its competence and capabilities in carrying out its responsibilities. 1.15 While JEA is responsible for electricity generation, transmission and distribution throughout Jordan, power operations in the cities of Amman and Irbid are entrusted to the concessionary companies of JEPCO and IDECO. JEA's involvement in distribution activities outside the Irbid and Amman areas and its active role in promoting regional electrification are justified since it would not be reasonable to have more small, separate entities involved in electrification of small towns and villages, where the Government's financial support is still needed. JEA has taken over several small organizations, which had been supplying power to remote towns. The present set-up of JEPCO and IDECO existing alongside JEA in the power subsector appears to be sensible for the foreseeable future. 1.16 JEA is well organized and properly managed. Its present organization structure is based on the recommendations of the management consultants appointed under Credit 386-JO. Details of the organization are shown in Annex 1.3 (Chart WB 22339). JEA's Director General, a capable and experienced engineer whose reputation is internationally known, is supported by the Chief Engineer and departmental managers. All managerial staff have a university education and several years of experience in power operations in Jordan and abroad. 1/ Amended afterwards to become the General Electricity Law No. 8/1976.  1,17 The Authority has a total staff of 1,373 with 681 technical staff of which 114 are graduate engineers. At the end of 1980, about 180 positions were vacant. These vacancies are mostly related to new projects to be started in 1981 and reflect rapidly increasing staffing requirements needed to meet JEA's intensive growth. JEA staff salaries are appropriate for Jordanian circumstances. Although there is a continuous movement of qualified technica'L staff to oil-rich Arab Gulf countries, where salaries are much higher, the majority of the staff does not stay more than two- three years abroad after which they return to Jordan to join JEA or JEPC0, Lhe major employers of the technical staff experienced in power supply operations. 1,18 JEA pays due attention to the training of its staff. In con- nection with the Third Power Project (Loan 1688-JO) JEA has prepared a detailed and satisfactory staff training program and implementation schedule covering all JEA's training needs. This program, which would be implemented by the end of 1983, will enable JEA to develop and improve its technical, financial and administrative services (para. 2.03). The Jordanian Eleciric Power Company (JEPCO) lc19 JEPCO is an investor-owned utility which distributes electricity to the city of Amman and its environs covering an area of about 2,000 km2. The company is owned 68% by individuals, 7% by municipalities, 4% by companies, 14% by JEA and the rest by various institutions. JEPCO's M-ain generating station at Marqa was transferred to JEA in 1976 and two other small and inefficient stations were retired causing JEPCO to cease activities in power generation. JEPCO now purchases all power from JEA at the 33-kV voltage Level. Since JEPCO is the major power distributor in Jordan (about 80% of total sales in 1980), the continuation of its sound development is very important for the entire power subsector. 1,20 The Concession Agreement (1962) between the Government and JEPCO for the power suppLy in the Amman area for a fifty-year period specifies JEPCO's rights and obligations and the Articles of Association (1978) define matters concerning the company's capital, responsibility of share- :.olders, issue and sale of shares, procedures of the General Assembly, election and activities of the Board of Directors, distribution of profits, auditing, etc. JEPCO's Board of Directors is composed of eleven members; tWo of them are nominated by the Government and the other nine are elected by the General Assembly. To encourage JEPCO to play a more active role in rural electrification and power supply to low cost housing estates, the Government has arranged loans for it from international and bilateral financial institutions, such as the European Investment Bank, USAID, etc. 1l21 JEPCO's organizational structure is shown in Annex 1.4 (Chart X7B 22337). Basic improvements are needed in JEPCO's organization and ainagement in order to improve the quality of the company's services and  - 9 - its efficiency. Improvement of billing procedures and the establishment of a satisfactory management information system are especially necessary. JEPCO has agreed: (i) to employ by December 31, 1981 consultants with qualifications and terms of reference satisfactory to the Bank to recommend by December 31, 1982 improvements in JEPCO's organization, billing system and management practices; and (ii) after taking into account the Bank's comments, to implement promptly the consultants recommendations. 1.22 At the end of 1980, JEPCO had 1,215 employees, of which 782 were in operations. Although JEPCO's staff salaries are somewhat higher than JEA's, JEA is more attractive for engineering staff because of its extensive development. In addition to regular salaries and wages, JEPCO has introduced 13th and 14th month salaries, accommodation allowances, discount for electricity consumption and other incentives in order to retain its professional and skilled labor staff. 1.23 JEPCO's training programs have been carried out with the assist- ance of the Jordanian Vocational Training Corporation. About 100 students have been selected to be trained with various technical teams in the com- pany for a period of three years. In addition 20 students, sponsored by JEPCO and attending courses at engineering colleges, are being trained in the technical and administrative departments of the company. In 1979 two engineers were sent to the UK and the USA to attend training courses. Although the previous training of JEPCO's staff has been satisfactory, further continuous efforts are needed to intensify JEPCO's training activi- ties and prepare comprehensive staff training programs covering all basic training needs (para. 2.04). The Irbid District Electricity Company (IDECO) 1.24 IDECO, the other concessionaire company, operates a diesel power station (9 MW) and distributes power in the Irbid area, in part of the Jordan Valley and in some rural areas. Power consumption in the IDECO concession area is less than 10% of the total power consumption in Jordan. The company is owned 46.5% by JEA, 42.5% by the Municipality of Irbid and 11% by private investors. IDECO used to have major managerial and finan- cial problems which have now been resolved. JEA seconded its managerial staff to IDECO and the company's organization and management have been sub- stantially improved and have now reached a satisfactory level. With the assistance of the Government, all necessary financing has been secured for IDECO's development program during the period 1981-1985. IDECO's rural electrification schemes are financed by loans obtained from the USSR and the UK.  - 10 - Historical Development of the Power Subsector 1.25 National power subsector statistical data for the period 1971-1979 and details of JEPCD and IDECO data are shown in Annexes 1.5 and 1.6. From 1971 to 1979 total generation (including imports) increased from, 230.4 GWh to 885 GWh, while consumption of electricity rose from 204 GWh to 723 GWh (trend growth rate 18% p.a.). Electricity sales in 1979 are summarized below by customer categories and administrative districts: Customer Category Administrative Districts % Total Amman Irbid Karak Ma'an -- - - - -- - - -GWh