Program to Support Energy Efficiency in Industry and the Service Sector in Jordan

Jordan is 99% dependent on fossil fuels, 95% of which are imported, and in 2002 it was hit hard by the rise in global oil prices. The country’s energy bill accounts for nearly 20% of GDP. According to the Jordanian Ministry of Energy, primary energy consumption has been growing by an average of 8% per year since 2003. Final energy consumption is broken down as follows: transportation (37%), industry (24%), residential (22%), and other sectors, including the service sector (17%). Faced with the challenges of energy dependence, the Jordanian government has launched a series of priority policy and legislative initiatives aimed at promoting energy efficiency, regulating demand, and harnessing the potential of renewable energy. With the project’s support, it plans to create a new instrument, the Jordan Renewable Energy and Energy Efficiency Fund (JREEEF). The Jordanian banking sector invests very little in energy efficiency and renewable energy (EE-RE). AFD therefore launched a diagnostic study in Jordan in September 2006 to quantify the investment needs of the industrial and service sectors in these areas and to identify the regulatory, technical, and financial barriers hindering the growth of such investments.

The project is structured around five main components: Support for the assessment, formulation, and financing of EE-ER projects: inventory and creation of a project database; establishment of eligibility criteria and project validation procedures; assistance with EE-ER processes; certification of EE-ER projects under the “Environmental Protection and Clean Production” label; monitoring of project implementation and measurement of benefits achieved; Awareness-raising, information dissemination, and development of an EE-ER market: project kick-off event; sector-specific awareness-raising workshops for business leaders; analysis of the local equipment market; communication with stakeholders; and dissemination of results; Strengthening national capacity for technical assistance to businesses: needs assessments and action plans, organizing and participating in EE-ER training workshops, partnerships between training institutions and the private sector, and accreditation of EE-ER auditors. Support for the development and implementation of institutional reforms. Establishment of the Project Management Unit (PMU) – Monitoring and Evaluation – Measurement of Results: Implementation of project activities is entrusted to a dedicated PMU, which forms the core of the future JREEEF fund currently under preparation. The JREEEF will be an autonomous legal entity that will serve as a coordinator, catalyst, evaluator, and disseminator of best practices in energy management.

The project contributes to Jordan’s local, economic, and social development: it strengthens local expertise in energy efficiency and renewable energy projects in the industrial and service sectors; raises awareness and engages local communities; supports the creation of a market for equipment that fosters the growth of engineering firms, installers, and equipment manufacturers; and improves the competitiveness of the industrial and service sectors by reducing their energy bills. Furthermore, by implementing energy efficiency measures in the industrial and service sectors, it reduces their energy consumption by 20 to 30 percent. In this way, the project contributes to the preservation of the global environment, and in particular to the fight against climate change. Finally, the energy efficiency credit line established by AFD and the financial contribution from the FFEM encourage genuine commitment from operators and stakeholders in the industrial, service, banking, and institutional sectors.