World Bank member earmarks $50m for Jordan’s green projects

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International Finance Corporation (IFC), a member of the World Bank Group, will invest up to $50 million in a five-year bond issued by private sector bank Jordan Kuwait Bank (JKB) to fund green projects in the country.

The financing comprises up to $36 million from IFC’s own account, a blended finance co-investment of up to $10 million from the Canada-IFC Blended Climate Finance Program and $4 million from the Dutch-funded Mena Private Sector Development Facility.

JKB will earmark the proceeds for green projects and assets, including renewable energy projects, low-carbon vehicles, green infrastructure such as low-carbon transport, new energy-efficient green buildings and sustainably managed water resources and waste.

IFC’s advisory services will help build the bank’s technical capacity to identify eligible projects and develop a framework to measure and report on impact.

“We are introducing a new asset class to the Jordanian capital market that is designed towards building an environmentally sustainable and responsible banking industry,” said Haethum Buttikhi, CEO of JKB.

Jordan, one of the world’s most water-stressed countries, faces severe climate change risks aggravated by inconsistent rainfall, higher temperatures and a population increase driven by the current refugee influx. Despite this, green and climate finance are still nascent in the country and there is no green bond market.

“Mobilising private sector financing and exploring innovative financing options for climate mitigation and resilience projects are crucial to address the drivers and impacts of climate change,” said Khawaja Aftab Ahmed, IFC regional director for the Middle East, Pakistan and Afghanistan. 

“The first green bond will not only promote climate-smart, sustainable projects in Jordan, but also set the standard for green bonds in the market and encourage others to follow suit.”

According to the World Bank Group’s country climate and development report, Jordan needs $9.5 billion in investments to move toward low-carbon development and foster a greener economy. Over 60 percent of the money must come from the private sector.

IFC has invested over $2 billion in the country in the last 50 years, delivering Jordan’s first wind farms and the largest renewable energy project.