Government signs 225-million-euro loan agreements with AFD, KfW

Amman, The Jordanian Government on Wednesday signed two financing agreements of concessional joint loan with the French Development Agency (AFD) worth 150 million euros and a similar agreement with the German Reconstruction Bank (KfW) worth 75 million euros, to be followed by a similar agreement in 2018.

The agreements aim to support the public budget and to finance the water sector policy, a planning ministry statement said.

The agreements were signed by Minister of Planning and International Cooperation Imad Fakhoury, Marie-Helene Loison, Director of Middle East and Southern Mediterranean Affairs at the AFD, and Stefan Zeeb, Director of the Bank’s Middle East Department.

The signing ceremony was attended by Water Minister and Hazem el Nasser, French Ambassador in Amman David Bertolotti, Ralf Schroer, German Deputy Ambassador, and Luc Le Cabellec, Director of the French Agency Office in Amman, and Christian Schaub, Director of the German Construction Bank Office in Amman.

Fakhoury said that (AFD) will provide a 150 million euro as a loan to the Jordanian government as part of the memorandum of understanding signed with the AFD for the years 2016-2018, As part of France’s commitments at the London Conference, this loan also represents the contribution of the French Agency of the syndicated loan to finance the program “Support to Water Sector Reforms” (DPL).

He explained that the loan will be disbursed in two installments of 75 million Euros each (the first before the end of this year and the second in 2018). The Government will pay fixed and concessional annual interest rate (1.86%) to be determined at the date of withdrawal of each payment. The loan has a life span of 17 years, including a grace period of three years.

The second loan, he said, comes as part of the German aid, which was recently committed in 2017, amounting to 577 million euros, as part of the German commitments at the Brussels conference.

KfW will provide a 75 million euros loan to the Government as a first payment of the bank’s total contribution from the “Water Sector Reform Support” financing loan wort50 million euros. This is the first loan of its kind to support the public budget. A second financing agreement will be planned for the next year (2018) for the second payment of the German KfW’s contribution of 75 million euros. The government pays a fixed rate of interest (1.45%). The repayment period is 15 years, including a grace period of five years, according to the statement.

The planning minister expressed Jordan’s appreciation for the French and the German support to the Kingdom, especially vital sectors such as water, sanitation and other priority projects.

He stressed that the government is working jointly with German and French partners to finance projects within the executive development program and the Jordanian response plan for the Syrian crisis.

Source: Jordan News Agency