The French Development Agency (AFD) is officially launching SUNREF initiative- Sustainable Use of Natural Resources and Energy Finance, to incentivize companies and households in Jordan to invest in renewable energy, energy efficiency and environmental performance.
SUNREF Jordan is a 38.5 million JOD credit line extended at attractive terms to Cairo Amman Bank and Capital Bank of Jordan, for onward lending to businesses and households. The initiative is supported by a team of financial and technical experts funded by FFEM (Fonds Francais pour l’Environnement Mondial) who will be available free of charge to help both banks and companies assess good investments.
The banks will be extending loans to clients at attractive conditions in terms of maturity, grace period and rate to finance eligible green projects. As a further incentive, the EU has allocated grant funds to provide cash back incentive payments amounting to 5% of all investments in energy efficiency and renewable energy funded under SUNREF that will repay quickly from the energy savings they achieve.
The AFD initiative is also funding expert assistance to the Government of Jordan, to help it implement its national strategies towards sustainable development. A focus of this support is towards the capacity building of the Ministry of Energy and Mineral Resources’ Jordan Renewable Energy and Energy Efficiency Fund (JREEEF) which is looking to fund innovative projects aimed at contributing at reducing energy consumption.
The Minister of Energy and Mineral Resources Mohammad Hamed said that this program would opportunely complement the legal and regulatory environment already in place to address the country acute dependency on imported energy. "Scaling up the implementation of renewable energy and energy efficiency projects will help reduce the country’s significant energy bill, reaching towards the Government’s objective to increase the renewable energy share of the energy mix to 10% by 2020".
Serge Snrech, AFD Director for Jordan and Iraq, explained that SUNREF represents a tremendous opportunity to help Jordan’s economy improve its competitiveness because "efficient equipment can actually help save both resources and money. However such equipment requires a significant initial investment which has to be spread over time: this is why we have teamed with local banks and the EU to offer loans of long maturity at low cost." He added that the facility will help provide funding for crucial projects and hence help achieve the Jordanian government’s objectives aimed at reducing energy costs and optimizing the use of natural resources. "This is important in a country where the scarcity of energy and natural resources is constraining the full expression of economic opportunities".
AFD is committed to financing green sector projects worldwide. To date, the institution has engaged the equivalent of over JOD 1.9 billion internationally, alongside JOD 63 million of subsidies, including EU grant funds.