AMMAN — The
International Monetary Fund (IMF) stated that the financial status for the National Electric Power Company
(NEPCO) remains difficult in spite of the decrease in the losses predicted for
2022, indicating that the company’s arrears amounted to JD100 million at the
end of March, Al-Mamlaka TV reported.
اضافة اعلان
In the concluding fourth revision report which was
issued on Monday, the IMF stated that the government has worked to contain the
NEPCO losses to around 0.5 percent of the GDP in 2022, anticipating a 2.7
percent increase in consumption this year, due to the new, subsidized
electricity tariffs paid by companies.
The fund expects that NEPCO’s long-term supply
contracts for natural gas and relatively high renewable energy will protect the
company from rising global fuel prices in the near term. It also expected NEPCO
deficit to decrease to 0.3 percent of GDP in 2022, due to increased electricity
consumption, and unexpected delays in the production of the Attarat oil shale
project.
However, the balance of the NEPCO arrears amounted
to JD100 million at the end of March, as financial requirements for the months
of last December and March were not met, said the report, which predicted that
NEPCO’s financial losses would rise to 0.7 percent of GDP in 2023, before
declining to 0.4 percent in the medium term.
The IMF indicated that restoring NEPCO’s financial
viability requires continuous reforms, as the roadmap for the financial
sustainability of the electricity sector, which is being developed in
consultation with international partners, will set measures to improve its
operational balance.
NEPCO’s arrears amounted to JD100 million at the end of March
These measures include boosting revenue by
introducing time-of-use tariffs, installing meters for all connected houses,
and increasing exports to neighboring countries.
The fund added that “if global energy prices and the
cost of electricity generation rise significantly above the baseline for
workers, it will also be necessary to consider adjusting electricity tariffs
toward cost recovery levels to protect NEPCO financing”.
Cost reduction measures include reducing LNG storage
and regasification costs, improving electricity storage, and optimizing costs
related to PPA commitments.
The fund stated that governance reforms, supported by the
European Bank for Reconstruction and Development, will help enhance
accountability as well as improve the operational efficiency of the NEPCO.
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