Announcement of Thirty Million Dollar Loan to Jordan on December 22, 1983

*WorId Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.* Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 84/33 Contact: Fawzi Rihane December 22, 1983 (202) 477-3651 WORLD BANK APPROVES $30 MILLION LOAN FOR ENERGY DEVELOPMENT IN JORDAN Jordan will use a loan of $30 million from the World Bank to increase electric power distribution in the country, and to improve petroleum exploration. The project is a key step in the development of a comprehensive and coordinated action program in Jordan's energy sector. Jordan relies on imported crude oil for its supply of commercial energy. The growth of imports of crude oil and petroleum products is expected to be about 11% a year for the period 1983-1990, or about 5.8 million tons in 1990 compared to 2.4 million tons in 1983. Domestic energy resources consist of deposits of oil shale, some tar sands, a small hydropower potential, and a few geothermal sources. The project will expand and improve the urban distribution networks of the Jordanian Electric Power Company (JEPCO) and the Irbid District Electricity Company (IDECO) and provide electricity to about 75 villages in the governorates of Amman, Balka, and Irbid. Boilers and heat exchangers will be tested for efficiency with the use of equipment to be purchased under the project. To promote energy conservation, consultants will be engaged to help conduct energy efficiency audits and prepare projects in about 10 industries. The project will also provide equipment needed to develop alternative energy sources, particularly solar energy. The project involves a major effort in planning development. This includes research, development of an energy data base, and studies for power conversion and for an effective tax system for petroleum products. Equipment, training, and consultant services will be provided to improve petroleum exploration, drilling, and production. The project will be coordinated by the National Planning Council. Power distribution will be under JEPCO and IDECO, two well-organized power companies that have a combined staff of over 2,000. Petroleum exploration will be carried out by the National Resources Authority. NOTE: Money figures are expressed in U.S. dollar equivalents -2- JEPCO and IDECO are providing $32 million for the $68 million project, while the government will contribute $3.2 million. Besides the $30 million World Bank loan, other financiers--the European Economic Community, the Italian Government, the United States Agency for International Development, and the United Nations Development Programme-- are expected to provide funding of a combined total of $2.8 million. The World Bank loan is for 17 years, including four years of grace, with a variable interest rate linked to the,cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75% on undisbursed balances and a front-end fee of 0.25% on the amount of the loan. 00