Jordan : establishment of the foundations allowing
the reform of the structures
The programme of privatization of Jordan, much less mature
than that of Abou Dhabi, follows from there less one very similar model :
the government remains exclusive purchaser of energy, the transmission falls on
companies of state, but the production and the distribution must be gradually
privatisées.
Being more particularly the field of the production of
electrical energy, Jordan Electricity Sector Report published in
January 2001 estimated that Jordan would need more than 10.000 GWh to satisfy
the electric demand for 2005, and 12.500 GWh around 2010, is respective
increases in 34% and 65% compared to the production of 2000.
In 1999, in order to prepare privatization, the government
replaced the law of 1996 by the news General Electricity Law n° 13. The
same year, the national company in load of the production of electricity NEPCO
(National Electric Power Company) was separate into three :
NEPCO, CEGCO (Central Electric Generating Company) and EDCO
(Electric Company Distribution).
NEPCO, which remains state-owned property, deals of the
direction, the exploitation and the development of the distribution network
high voltage, the control system and the regional grid. It is this entity which
is the single purchaser.
CEGCO is the principal company of Jordanian production ;
it should be privatisée in the short run. EDCO should follow the same
way ; it is responsible for the distribution of electricity outside the
concessions granted to Jordan Electric Power Company (JEPCO) and
Irbid Distribution Company (IDECO). The process of privatization of CEGCO
and EDCO timidly started with semi-2002, whereas it began in 2001 for IDECO,
whose government wishes to give up 55 to 70%. It should be noted that the
privatization of these companies is a condition posed by the International
Monetary International Monetary Fund with the extension of the facilities
granted to Jordan.
The tariffs of electricity were fixed in May 1996, but taking
into account the trend of the price of the oil barrel, the government had to
re-examine them since 2001. The tariff applicable to the distributive firms
should increase, and be reflected then towards the end-user.
The bases were thus thrown. In May 2000, the Jordanian
government chooses as a preferred bidder for the development and
construction in BOO of the first IP of the country. The negotiations with the
Belgian group had already trailed during years, primarily because of
uncertainties related to the origin of gas necessary to the production. Located
with Kherbet-Al-Samra, the factory was to have a capacity of 450 MW. Until
2002, the Jordanian government and TRACTEBEL negotiated certain aspects of the
project, including the terms of financing, in the hope to concretize it during
2003. The business, in any event, could hardly progress without the
construction of a suitable pipeline. Unfortunately, on the instructions of its
SUEZ shareholder, TRACTEBEL, which had already given up depositing an offer for
the business of Umm Al Nar in Abu Dhabi a few hours before the opening of the
folds, gave up the Jordanian business abruptly.
In addition to the vexations of SUEZ because of hazardous
investments in the field of the water treatment, one can guarantee, there
still, that the situation in Iraq is not foreign with this withdrawal. All this
of course has very negative effects on the credibility of Jordan and
discourages the financial organizations which, otherwise, could have invested
in the sector, which shows, but this time in a negative way, the close
connection which exists between the privatization of the sector and the
development of the financing of project.
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