World Economic Forum: Jordan in $12bn investment drive
Dead Sea // Jordan plans to unveil a multibillion-dollar programme of foreign investment and create thousands of new jobs in the country at the World Economic Forum on the Middle East and North Africa.
King Abdullah will formally open the forum today at the Dead Sea Resort, and then hand over to the prime minister, Abdullah Ensour, to announce details of the investment plan. It was being finalised at a series of meetings yesterday, a source close to the Jordanian government said.
Mr Ensour said that the value of deals already signed was $12 billion, but that could rise to as much as $20bn if last-minute talks were successful. He did not specify the time frame for the investment programme but it is likely to be spread over a number of years.
Investment from the Arabian Gulf region, including the UAE, is likely to figure prominently in the programme. Most of the new investment will be in energy and power, but there will also be big spending on infrastructure, urban development, tourism and agriculture.
Among the deals the Jordanians will announce are those the country hopes will help it to tap into the shale oil revolution, during which oil output in the US has doubled in the past five years as new technology has opened up huge reservoirs of oil from previously inaccessible geologies.
Jordan has an estimated 2 billion barrels of potentially recoverable reserves of shale oil which it hopes will help it achieve its goal of reducing dependence on imported energy from 97 per cent – consuming a fifth of its GDP – to 60 per cent by 2020.
Earlier this week, the Jordanian cabinet approved a $1.4bn deal with Questerre Energy of Canada, which will be among today’s deal signings, the source said.
The company is expected to carry out tests at two sites and develop a shale oil distillation project in the southern Jafr region.
Although the government and Questerre have put a $1.4bn value on the project, the final amount will depend on it being commercially viable. Other shale oil projects in Jordan have struggled to attract financing, such as Eesti Energia, Estonia’s state-owned energy concern.
But Jordan is well advanced on a shale oil-fired power plant, led by Chinese investment, that is expected to be completed by 2018.
Jordan yesterday also announced a deal with Rosatom, Russia’s state nuclear energy corporation, to study plans for atomic energy generation. Jordan plans to build two reactors by 2018 with nuclear supplying 40 per cent of the country’s electricity needs by 2025.
As about 800 business and political leaders arrive at the forum, the country is keen to demonstrate its investment attractions and its economic resilience in the face of regional unrest in neighbouring Syria and Iraq.
Most economic experts, including the IMF, have applauded Jordan’s economic performance in tough regional circumstances. “The conflicts in Syria and Iraq are resulting in disruptions to trade routes, less tourism, a hesitant investment sentiment, high costs to accommodate refugees, and pressures on the quality of public services,” the IMF said recently.
“Nonetheless, growth is holding up, inflation is low, the current account deficit is narrowing, international reserves are at a comfortable level, and the banking system is robust.”
Stuart Anderson, managing director of Middle East business for the ratings agency Standard & Poor’s, said: “Assembling such a concentration of regional leaders from both public and private sectors is a wonderful opportunity to focus that talent and expertise on addressing Mena’s critical issues.
“Jordan as host country provides a venue which offers great perspective on the opportunities for economic growth and stability, in the context of geopolitical challenges.”
Abdel Fattah El Sisi, the Egyptian president, will address the forum on the opening day on the subject of “Egypt in a transforming region”. One late attendee at the Jordan forum will be Ali Tayebnia, the finance minister of Iran. A WEF source indicated he had signalled his intention to attend at the last minute. Gordon Brown, former British prime minister and one of the co-chairs of the forum, will make the case for increased infrastructure investment in Jordan and the rest of the Mena region.