Alghad -  A report on the energy sector said that the trend towards a transition to renewable energy in Jordan is still in place according to the comprehensive strategy for the energy sector for the years 2020 - 2030. The
report on “Decentralized Solar Energy Systems: Financing Future Energy” stated that it is expected that the installed capacity of systems will increase Renewable energy from 2,400 megawatts in the year 2020 to 3,200 megawatts in the year 2030 provided that these capacities are exploited to cover the consumptions of the final consumers through a model that is not clear whether the current transit system will follow or work on a new model, as these stations will be built within Aggregations with a minimum of 50 or 20 megawatts within government lands.
This report, which was launched yesterday by the Edamah Association for Energy, Environment and Water in cooperation with the Friedrich Ebert Foundation, comes within a series of reports that aim to encourage the deployment of decentralized solar systems by providing recommendations and proposing solutions to the obstacles that hinder the development of small and medium solar energy projects in Jordan. The first report provides administrative measures and recommendations on how to improve them in order to achieve maximum social and economic returns.
The report indicated that renewable energy projects in Jordan have recorded rapid growth since the issuance of the Renewable Energy and Energy Efficiency Law No. 13 in 2012, so that the contribution of renewable energy within the first energy mix has increased from 2% in 2013 to 8% in 2019 and is expected to reach 12% in 2021.
The installed capacity of renewable energy projects reached approximately 1558 MW by the end of 2019, of which 985 MW are large-sized projects, while the capacity of small and medium-sized enterprises is approximately 570 MW, which have been linked via net metering and transit meters. As renewable energy constitutes about 25.7% of the total generating capacity of the Jordanian electrical system.
Small and medium-sized enterprises also witnessed significant growth, as the number of systems connected to the network increased from 292 systems in 2013 to reach 15,349 systems at the end of the year 2019.
The term “decentralized solar energy” refers to small-scale solar energy projects connected to the electricity distribution network with voltage Low, medium and near consumption points.
Investing in renewable energy
The renewable energy sector in Jordan started to attract capital after the first phase direct bid projects were announced in 2011, where the volume of investment reached nearly $ 300 million at the end of 2013 and rose to reach its highest value in 2016, by $ 934 million. A total of $ 3.947 billion until the end of the year 2019. The
percentage of foreign financing in these projects is estimated at 75%, and the role of international financing institutions and banks is mainly in financing large-sized projects.
The increase in demand for electricity continues even though the numbers in 2018 show a decrease in demand by 2% compared to the previous year. This is due to the traditional method of calculating the growth in demand for electricity, which takes into account the growth in revenues and the impact of renewable energy is not calculated Vehicle within this equation.
Challenges
The legislative and project development mechanisms are directly reflected in the ease of obtaining financing. Although there are stated goals to increase the share of renewable energy in the total energy mix, progress in this direction is slow compared to what has been achieved, as it is assumed that the capacity of Renewable energy in the next ten years is about a third of what was installed during the past seven years.
It should be noted that the Cabinet decision issued at the beginning of 2019, which requires the suspension of renewable energy projects that exceed 1 megawatt, is still in effect, and the suspension of this decision was linked to the studies that the Ministry of Energy and Mineral Resources is preparing, which are related to the assessment of the capacity of the electric grid. And recently, based on the decline in electricity demand that coincided with the comprehensive ban due to the Corona pandemic, the National Electric Power Company separated renewable energy stations through the transit system by crossing during the days of the comprehensive ban, which sends several messages about the technical challenges facing the electrical network and the seriousness of addressing them in a manner that guarantees The ability of the network to receive increasing amounts of electricity produced from renewable sources in the future.
central bank
Since the year 2011, the Central Bank launched a financing program to support the economic sectors and provide financing for all investment and operational purposes at low costs to increase the competitiveness of companies and enable them to expand their business and finance their operational activities, on conditions and easy costs, as the size of the program is 1,200 million dinars with a revolving ceiling, and the program targeted 10 economic sectors, including The renewable energy sector, where 23% of the program’s budget was allocated to this sector, ceilings were set for all sectors, and the renewable energy sector had the highest ceiling of 4 million dinars, 10 years for repayment and a grace period of two years.
Financing is granted to the final beneficiary through local banks, as the interest rate granted to the bank is 1.75% inside Amman and the expected price for re-lending projects through banks ranges between 4-5%, while the interest rate granted to banks in the rest of the kingdom's governorates is 1.0% and the expected price ranges To be refinanced between 3.0 - 4.0%.
The interest rates have been revised after the Corona pandemic to make the interest rate 1% in Amman and 5%. It is expected to be loaned back at an interest rate between 3.0-4.0% in the rest of the governorates, and 2.5% -3.5% in the rest of the governorates.
Fund to Encourage Renewable Energy
Through the Rooftop Photovoltaic Energy Systems Program, the equivalent of 13 megawatts of small and medium-sized systems has been installed, with the largest share, which is 73%, of installed systems for public and government buildings, while the remaining agricultural, industrial and household sectors will be shared between 2015 and 2019.
The cost of supporting and financing the various programs provided by the fund amounted to nearly 19 million dinars. The total cost of the supported projects reached nearly 50 million dinars.
In order to implement the fund’s programs, cooperation has been made with the relevant authorities within each sector to facilitate the process of obtaining financing, including the Agricultural Credit Corporation. At the end of 2018, the Corporation was contracted to provide loans to farmers for the purpose of installing renewable energy systems to cover their consumption not related to pumping water from artesian wells at a maximum. 15,000 dinars, as the Renewable Energy Promotion Fund pays the interest value over the length of the financing repayment period. The Foundation has funded 124 agricultural projects, the value of which exceeds one million dinars, until the end of September 2020.
Jordan Chamber of Industry
The establishment of the energy unit coincided with the start of work on the projects of the Energy Encouragement Fund in 2015, as programs related to the industrial sector were implemented through this unit, as 65 factories were funded to carry out energy audit studies by 50% equally between the fund and the final beneficiary, and the implementation Energy efficiency technologies by subsidizing benefits within a ceiling of 350,000 dinars, and with regard to decentralized solar energy systems, 18 factories were supported to install photovoltaic systems, and then the program was stopped and the support provided was limited to energy efficiency services only.
Local banks
A number of local banks have been contracted to implement the soft financing program related to the household sector through these banks, where a subsidy of 30% of the total cost of the system is provided through the Renewable Energy Encouragement Fund, and the beneficiary installs the remainder of the total amount, which is 70% of the cost These systems are for a period of 48 months, within the ceiling set at 3.6 kilowatts or its equivalent, at a value of 1980 dinars.
The challenges also include the absence of a monitoring and evaluation program to ensure monitoring of the performance of both the financing windows and the intermediary agencies alike, the difficulty of meeting the requirements for applying for support, especially in the first version of the fund's programs, in addition to the challenges facing the project implementing agencies, which are the distribution of payments to Omar. The project is in addition to the delay in the payment of financial dues in a way that affects the financial flows of the companies and the absence of an open database to monitor the beneficiaries of the programs to ensure that they do not interfere with the programs offered by other parties.
Rural fils
In the year 2019, the Ministry of Energy and Mineral Resources called on beneficiaries of the National Aid Fund to benefit from a project to install solar cell systems fully financed by the ministry and intended for the benefit of about 7,000 families annually in various areas. The aim is to reach 100,000 families benefiting from the National Aid Fund over several years.
Until the end of the year 2019, the project was implemented in two phases, as the number of beneficiaries from the first phase reached 2,213 families and 3,166 families in the second phase, at a rate of 2 kilowatts per family.

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