The Neighborhood
Investment Platform has cemented the strong partnership between the EU and
Jordan, which could leverage up to 2.5 billion euros of public and private
(PPP) investments, in line with Jordan’s Economic Modernization Vision. It has
the potential to enhance growth and innovation, create quality jobs, develop
human capital, and raise living standards and environmental sustainability.
اضافة اعلان
The targeted investments will be linked with
bilateral and multilateral donors, enabling Jordan to take full advantage of the
opportunities offered under the platform and the new system of guarantees by
the European Fund for Sustainable Development Plus (EFSD+).
The Russia-Ukraine war has strongly impacted the
trajectory of energy dynamics in Europe, particularly the EU’s quest for
diversification of energy supplies. While the crisis has also triggered the
renewal of demands for clean energy talks and climate policies across and
between MENA and Europe, it has also created winners and losers in the race for
global energy transition.
According to the Climate Policy Initiative, MENA
currently receives the smallest amount of climate finance of any region in the
world, an estimated $16 billion a year, with financing needs estimating at $186
billion in the nationally determined contributions submitted by countries
pledging climate action.
In Jordan, the disruption of commodity supply chains
and increased energy prices have led to a sharp rise in consumer prices,
including of electricity, exacerbating the economic downturn caused by the
COVID-19 pandemic. Therefore, the Jordanian government has lifted fuel and
electricity subsidies to restore fiscal stability.
Renewable energy sources contributed around 29
percent of Jordan’s total energy output by 2022, and the country aims to
increase this proportion to 50 percent in 2030. The current energy crisis has
motivated the energy transition and the digitization of ecosystems to avoid
high-priced electricity bills.
Meanwhile, taking advantage of Jordan’s geopolitics
might make the Kingdom a catalyst for a renewed Euro-Mediterranean
relationship; moreover, the potential of green hydrogen to become a promising
renewable source could help Jordan receive foreign direct investments to
achieve the Sustainable Development Goals (SDGs).
MENA currently receives the smallest amount of climate finance of any region in the world, an estimated $16 billion a year, with financing needs estimating at $186 billion in the nationally determined contributions submitted by countries pledging climate action.
Attracting FDI that supports sustainable development
is particularly relevant in Jordan, where FDI is a substantial source of
external financing; the FDI stock-to-GDP ratio currently exceeds 80 percent.
Sustainable investment is only possible if a solid
and robust infrastructure system exists. According to the World Bank,
investments of at least $100 billion per year over the next five to ten years
can maintain existing MENA infrastructure and build new one. The most
significant financing gaps are cross-border infrastructure, road transport, and
energy.
High-quality infrastructure is crucial to inclusive
and sustainable growth. It can reduce logistics costs, facilitate trade,
enhance export diversification, and boost competitiveness. Jordan’s choosing to
upgrade its infrastructure provision stands to have a long-term impact on
Euro-Mediterranean integration.
The EU-MENA renewable hydrogen partnership, an
innovative institutional cooperative framework, may help unlock many barriers
and enable a higher degree of Mediterranean engagement. If successfully
implemented, it will be a unique opportunity for Jordan to participate in this
renewable power transformation from Jordan to the EU market.
Development finance institutions are positioning
infrastructure and connectivity at the top of their agendas to promote green
and sustainable growth and thus support the EU’s Global Gateway. Therefore, the
Kingdom needs to maximize benefits and minimize potential risks by building on
the institutional and organizational capacities of the PPPs investments and job
employment within this new green paradigm.
Hamzeh S. Al-Alayani is a board member of a Jordanian public-sector government investments
management company and a regular regional energy and industrial commentator.
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