Announcement of World Bank to Assist Potash Project in Jordan on September 7, 1978

. . " FOR IMMEDIATE RELEASE'- ~ - .World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/8 SEPTEMBER 7, 1978 WORLD BANK TO ASSIST POTASH PROJECT IN JORDAN The World Bank has approved a $35 mill ion Joan to help finance a P?tash project in Jordan. The $428.8 million project is to date the single largest industrial project to be undertaken in Jordan and aims at diversifying the industrial base of the Jordanian economy and developing one of the country's few known natural resources. It will be located on a 150 square kilometer area in the southern basin of the Dead Sea, some 130 kilometers from Amman. The project is designed to produce 1.2 million tons per year of potash from Dead Sea brine through solar evaporation. It consists of a solar evaporation and brine transfer system; a carnallite harvesting system; a refinery to produce fertilizer grade potash; utility facilities consisting • of power, water supply, and sewerage systems; and a town for workers. Port facilities will be provided at Aqaba, 200 kilometers away, to handle potash exports. At full capacity in 1985, foreign exchange earnings from exports {almost the entire production will be exported) will amount to about $150 million a year. Other benefits from the project will include the creation of 700 per- manent jobs and the establishment of a new industrial area with the possibility of growth in a remote area of the country. Among the financial institutions expected to co-finance the project are: the Kuwait Fund for Economic Development, the Libyan Arab Foreign Bank, the U.S. Agency for International Development, the Arab Fund for Economic and Social Development, and the OPEC Special Fund. In addition to the Government, equity funds will be provided by the Arab Mining Company, the islamic Develop- ment Bank, other Arab states, and private shareholders. The World Bank loan to the Arab Potash Company, to be guaranteed by the Government of Jordan, is for 13 years, including 6 years of grace with interest at 7.9% per annum. The Company will also pay a guarantee fee of 2.1% per annum to the Government. • NOTE: Money figures are expressed in U.S. dollar equivalents . FORM NO. 1121 (5-76) T E C H N I C A L DAT A PROJECT: COUNTRY: TOTAL COST: Arab Potash The Hashemite Kingdom of Jordan $428.8 mi 11 ion • BANK FINANCING: $35 million, for 13 years including 6 years of grace at an interest rate of 7.9% per annum, and 2.1% guarantee fee to the Government. OTHER FINANCING: DEBT: The Kuwait Fund for Arab Economic Development, the Libyan Arab Foreign Bank, the u.s: Agency for International Development, the OPEC Special Fund, and commercial loans. "EQUITY: Government, the Arab Mining Company, the Islamic Development Bank, other Arab states, and private shareholders. INTERNAL FUNDS: the Arab Potash Company. IMPLEMENTING ORGANIZATION: The Arab Potash Company (APC) P. 0. Box 1470 Telex: 1683 Potash JD Amman, Jordan Cable: POTASH, Amman PROJECT DESCRIPTION: It includes: (i) a solar evaporation and brine transfer system to concentrate the Dead Sea brine and transfer it between carnallite pans; (ii) a harvesting system for dredging and transporting the sol ids precipitated in the pans; (iii) a refinery to produce fertilizer grade potash; (iv) uti 1 ity faci 1 ities consisting of power, teleconmunications, and water supply • and sewerage systems; and (v) an associated township. PROCUREMENT: ;twill be carried out in accordance with the guidelines of the lending agencies. The project will be divide~ into three main procurement categories: (i) the township; (ii) solar evaporation ar\~ brine transfer systems; and (iii) the refinery which, together with other plant facilities, will be required to comply with acceptable internationally recognized standards to protect the environment and ecosystem in the project area and its vicinity. The contract for the township has been awarded after international competitive bidding. The civil works contract for the solar evaporation and brine transfer system will also be procured under ICB with pre-qualification of contractors. During February 1978, the civil works were advertised and bidding documents were issued in June 1978; the contract award is scheduled by end-1978. For the process plant, i.e., the harvesting system, refinery and power generating plant, procurement for both equipment supply and erection will be carried out under ICB except for a limited amount of small items and proprietary items which will be carried out after prudent international shopping. CONSULTANTS: Jacobs International, Inc., (USA) has been contracted and wil 1 execute the contract together with Sir Alexander Gibb and Partners of the United Kingdom and Technical Services Office of Jordan, ECONOMIC RATE OF RETURN: 12.4% ESTIMATED COMPLETION DATE: 1984 - 0 - •