IFC Climate Business | Stories of Impact
Jordan
Landmark Project
Fuels Region’s Shift
Towards Renewables
Tafila Wind Farm
Photo credit: World Bank
AT A GLANCE
• At completion, the Tafila Wind Farm’s
generated electricity accounts for
6.5 percent of Jordan’s renewable energy
target of 1,800 MW by 2020, generating an
estimated annual 400 gigawatt hours.3
• It is the first renewable energy project to follow
Jordan’s 2010 Renewable Energy Law.4
• The wind farm reduces greenhouse-gas
emissions annually by 177,530 tons of
carbon dioxide (C02) equivalent.
• During construction, the project created
250 jobs. Now in operation, it employs
around 40 personnel, adding value to local
Jordanian communities.5
• The project’s sponsor, the Jordan Wind
Project Company (JWPC), is the first private
company in the Mediterranean to use
wind power to generate electricity, helping
Jordan address its twin challenges of
dependence on imported energy and high
fossil fuel prices.
• IFC served as a catalyst to spur confidence
for companies to invest in Jordan’s
emerging renewables market and to
improve environmental, social, and
governance standards.
This series provides examples of our impact, expertise, and lessons learned
working with clients and partners.
Supported by an IFC investment of $69 million, Jordan
built the 117 megawatt (MW) Tafila Wind Farm in 2013.
It is the country’s first renewable energy project and is
the first private wind energy project to reach financial
close in the Middle East and North Africa region outside
of Morocco. It presents a viable alternative for a nation
that previously imported 96 percent of its energy needs
from an unstable foreign supply at a cost equivalent to
nearly 20 percent of its Gross Domestic Product (GDP).1,2
RESPONDING TO A RISING DEMAND
Jordan has no proven and exploitable oil or gas reserves,
with the exception of a small gas field in the northeast, and
the country’s arid climate prevents reliance on hydropower.6
Furthermore, its location in a region with high political
insecurity has had an inhibiting effect on its ability to import
energy. For instance, at the height of the Arab Spring in
2011, a series of attacks on pipelines led to interruptions in
gas supplies from Egypt, which were providing the fuel for
80 percent of Jordan’s power generation, exposing large
weaknesses in the energy supply chain to the country.7 A
combination of a heavy dependence on fossil fuels (97.2
percent of total consumption) and higher domestic generation
IFC Climate Business | Stories of Impact
costs revealed an uncertain future for Jordan and its ability to
provide power to its population.8
Supported by legislation that set forth ambitious renewable
energy goals, the Tafila Wind Farm demonstrated that there is
a substantial and competitive market in Jordan for renewable
energy development and room for innovative energy
generation approaches, such as wind power plants. In addition
to guaranteed grid access, Tafila Wind Farm has an agreement
to sell its privately-produced electricity directly to the National
Energy Power Company (NEPCO).9 When operating at its full
capacity, Tafila saves the government approximately $50
million annually by providing power to NEPCO at 25 percent
below the current wholesale electricity price.10
JWPC is the first private company in the Mediterranean
to use wind power to generate electricity, and is setting
precedents for other renewable energy projects in the region.
Furthermore, the public-private partnership that makes up
JWPC (EP Global Energy Ltd and InfraMed Infrastructure)
demonstrates European and North African investor confidence
in Jordan's economic development and stability.
The Tafila Wind Farm draws on other global resources, with
additional financing coming from the European Investment
Bank, the Eksport Kredit Fonden, the Organization of the
Petroleum Exporting Countries (OPEC) Fund for International
Development, the Europe Arab Bank, and the Capital Bank of
Jordan — contributing to a $221 million debt package. The
project structuring negotiated with Jordanian authorities
during Tafila’s planning phase has now become a model in
Jordan for structuring other renewable energy contractual
agreements and contracts.
IFC’S UNIQUE OFFER
As part of its long-term financial package with Tafila, IFC
addressed project and sector risks, and assisted Jordan in
reducing the country’s high environmental sensitivity to
climate change by better managing available resources to
meet the needs of its growing population. To reach its target,
Jordan enacted a policy mechanism called a “feed-in tariff,”
which guaranteed Tafila access to the grid via a long-term
contract and cost-based purchase price, creating market
stability and accelerating long-term investments. Jordan’s use
of a feed-in tariff, often viewed as the fastest way to scale-up
renewable energy deployment, is the first of its kind in the
Middle East.
CONTACT
SONA PANAJYAN | Washington, DC
[email protected] | +1 (202) 473 9751
www.ifc.org/climatebusiness
“The project is a quantum leap not only for
Jordan but the region as a whole, as it is the first
to implement an effective solution for Jordan's
energy challenges through a partnership
between the public and private sectors.”
—SAMER JUDAH
Chairman
Jordan Wind Project Company
IFC’s unique ability to provide on-going support helps Jordan
achieve two ambitious development objectives: increase the
amount of generated electricity and increase the amount of
utilized renewable energy. IFC’s commitment to support the
displacement of fossil fuels in a region heavily dependent
on their production is an important means to unlock new
channels for investment and economic development, helping
address regulatory and policy obstacles to green growth, and
ultimately foster a cleaner development path.
[1]
World Bank, 2016, World Development Indicators. Retrieved from http://data.
worldbank.org/data-catalog/world-development-indicators
[2] International Monetary Fund, 2015, IMF Working Paper: New Energy Sources for
Jordan-Macroeconomic Impact and Policy Considerations, by Andrea Gamba.
Retrieved from https://www.imf.org/external/pubs/ft/wp/2015/wp15115.pdf
[3] Masdar, 2016, Masdar Fact Sheet – Masdar’s 117 MW Tafila Wind Farm, Jordan.
Retrieved from http://www.masdar.ae/assets/downloads/content/4282/2016_
jordan.pdf
[4] Since 2007, the Energy Efficiency Strategy targets 7 percent of Jordan’s energy
mix to come from renewable energy sources by 2015, and 10 percent by 2020.
International Energy Agency, 2013, Renewable Energy & Energy Efficiency (Law No.
13). Retrieved from http://www.iea.org/policiesandmeasures/pams/jordan/name36862-en.php
[5] Union for the Mediterranean, 2014, Tafila Wind Farm. Retrieved from http://
ufmsecretariat.org/tafila-wind-farms/.
[6] International Monetary Fund, 2015, IMF Working Paper: New Energy Sources for
Jordan-Macroeconomic Impact and Policy Considerations, by Andrea Gamba.
Retrieved from https://www.imf.org/external/pubs/ft/wp/2015/wp15115.pdf
[7] International Monetary Fund, 2015, IMF Working Paper: New Energy Sources for
Jordan-Macroeconomic Impact and Policy Considerations, by Andrea Gamba.
Retrieved from https://www.imf.org/external/pubs/ft/wp/2015/wp15115.pdf
[8] World Bank, 2016, World Development Indicators. Retrieved from http://data.
worldbank.org/data-catalog/world-development-indicators
[9] International Energy Agency, 2013, International Energy Agency, 2013, Renewable
Energy & Energy Efficiency (Law No. 13). Retrieved from http://www.iea.org/
policiesandmeasures/pams/jordan/name-36862-en.php
[10] Jordan, 2015, Press Release: King Abdullah II Inaugurates the First and Largest
Utility Scale Wind Power Plant in the Kingdom and the Middle East. Retrieved from
http://www.prnewswire.com/news-releases/king-abdullah-ii-inaugurates-thefirst-and-largest-utility-scale-wind-power-plant-in-the-kingdom-and-the-middleeast-562808181.html