RENEWABLES
The Tafila wind farm The Tafila wind farm was the first commercial utility-scale wind power project in the Middle East. Located in Jordan, the 117 MW wind farm has increased the country’s total power capacity by 3.5 percent. The US$287 million project was the first wind power project to be developed under Jordan’s Renewable and Energy E ffi ciency Law passed in 2010 and became operational in September 2015. The facility has annually reduced Jordan’s CO 2 emission by 235,000 tonnes, produces 390 GWh of electricity and powers 83,000 homes. The Tafila wind farm was developed by the Jordan Wind Project Company and is owned by a consortium of international partners. It has won several international industry awards.
the first we talked to as it was one of the institutions we definitely wanted on board. And we were not disappointed. We developed a great relationship and signed a loan agreement in 2013. The contract is still active and we never had any issues. It was really perfect. OFQ : Why did you seek loans from development banks and not from the private sector? SJ: You have to look at the landscape in Jordan at that time. There were no renewables. Jordan does not have any significant natural resources in the energy sector. We used to import 97 percent of our energy needs in the form of heavy fuel and petroleum. Our project cost was US$287 million, but private banks at that time did not have the appetite for such a huge amount. They would say, “Before we see a project happening, we’re not going to get involved. And if we get involved, that’d be for a couple of million dollars only.” That’s why we started talking to development banks. “Lenders providing stability and delivering on their plans had a huge and lasting impact. It helped us to win global and prestigious sponsors.” Samer Judeh, Co-Founder and Executive Chairman, Jordan Wind Project Company
OFQ : And once you had IFC on board you were very successful in attracting other development banks. Was this your breakthrough? SJ: Indeed. Eventually we had IFC, OPEC Fund, Europe Arab Bank (EAB), European Investment Bank (EIB), Dutch Entrepreneurial Development Bank (FMO) and Danish Export Credit Agency (EKF) on board. These lenders giving a sense of confidence, providing stability and delivering on their plans had a huge and lasting impact. It helped us to win global and prestigious sponsors such as Masdar, InfraMed and, later on, the Saudi infrastructure developer Tamasuk and the Arab Energy Fund (TAEF). Despite the regional political challenges all these stakeholders had confidence in Jordan’s stability and investment climate. That in itself is a remarkable achievement. OFQ : It demonstrates the impact that development finance institutions can have. SJ: I agree. At the end of the day, the impact of this project is not the 117 MW the facility generates or the US$287 million it cost. The real impact is the groundwork, the contracts, the creation of the sector, the establishment of
renewables as viable alternatives, the billions of dollars that were mobilized and the development of a sustainable energy mix for a country that lacks natural resources. OFQ : What was crucial for the success of our project? SJ: The most important thing was the unity of all stakeholders: the investors who put their confidence in the development team, the lenders who put their confidence in the bankability of the project, but also the opposite side of the table, the government and the o ff taker. It wasn’t easy for them either. Trust has to be built slowly and carefully. It took us three years before we had all the studies together, from feasibility to environmental impact assessments. We had to satisfy the lenders that our project was financially viable, the o ff taker that we could guarantee reliable supplies and the government that we needed a sovereign guarantee to secure funding. I personally worked, along with many others in the sector, with the government and parliament on establishing laws on renewable energy and energy e ffi ciency, which did not exist.
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