Jordan – Scaling Up Renewable Energy Financing Facility
Background: Historically, Jordan’s energy sector has depended on fossil fuel imports for power generation, as Jordan’s electricity generation fleet is predominantly fuelled by natural gas. In 2015, an interruption to the supply of gas from Egypt forced Jordan to import expensive and polluting heavy fuel oil (HFO) to generate electricity. Today, the energy sector accounts for about 70% of the country’s greenhouse gas emissions. Over the past years, the Jordanian renewable energy (RE) sector has experienced remarkable growth, increasing the RE installed capacity from about 20 MW to over 1,000 MW (with an estimated 800 MW under construction). This growth however comes with significant challenges, as Jordan needs to take measures to improve the demand-supply balance and the capacity of the grid to absorb further intermittent RE generation while ensuring the grid’s stability. The Jordanian grid operator NEPCO will be required to curtail RE generation in the future unless further adaptive measures are introduced.
Approach to Transformational Change: This is where the project, “Jordan- Scaling Up Renewable Energy Financing Facility” will intervene. While most existing initiatives focus on accelerating the deployment of RE generation itself, this initiative would respond to the growing need to deal with underlying technical, operational and financial barriers related to the integration of further RE generation into the central power grid.
Mitigation potential: The contribution of this project to Jordan’s greenhouse gas (GHG) mitigation ambitions is subject to a degree of uncertainty. This is due to its structure as an investment facility that comprises one or several sub-projects, whose GHG mitigation impacts will only become more quantifiable as the sub-project(s) emerge. The GHG emissions mitigation potential is estimated to be up to 425,000t CO2e per annum, which represents about 4.5 % of Jordan’s cumulative GHG emissions reduction target laid out in the country’s first updated Nationally Determined Contribution (NDC) until 2030.