By Mays Ibrahim Mustafa – Sep 12,2023

International Finance Corporation Regional Director for the Middle East Khawaja Aftab Ahmed and Ethiopis Tafara, Vice President, Chief Risk, Legal & Sustainability Officer and Partnerships for the World Bank Group’s Multilateral Investment Guarantee Agency, during an interview with The Jordan Times (Photo courtesy of World Bank Group)

AMMAN – Supporting the implementation of reforms in cross-cutting areas related to climate change, water scarcity and job creation is a priority agenda in the Kingdom, said officials from The World Bank Group in an exclusive interview with The Jordan Times.

Khawaja Aftab Ahmed is the International Finance Corporation (IFC) Regional Director for the Middle East, Pakistan and Afghanistan. He noted that IFC’s priority projects in Jordan are focused on addressing gaps in the labour market related to gender equality and youth employment.

According to the Department of Statistics (DoS), the rate of youth unemployment in Jordan stood at 46.1 per cent for the age group of 15-24 years during the first quarter (Q1) of 2023, while the female labour force participation rate equalled 13.7 per cent during the same period.

Aftab said that IFC’s previous efforts in that area include supporting Flat6Labs, a regional start-up accelerator and seed investment company, and launching She WINS Arabia programme, which aims to support women-led start-ups across the Middle East and North Africa (MENA) with mentorship and financing.

He added that a project is currently under way to address gender inequalities in the labour market by increasing access to affordable and quality day-care centres. Upcoming IFC projects focused on job creation include the launch of a large-scale IT upskilling programme that will provide youth with training in coding, artificial intelligence, and other related areas.

Significant milestones

Aftab pointed out that IFC’s investments and advisory services have been “instrumental” in the implementation of many firsts in Jordan, including Queen Alia Airport, which was the first successful airport public-private partnership in the Middle East region. 

He also commented on the expansion of IFC’s office in Amman into a regional hub for the Middle East, Pakistan and Afghanistan. 

This step cements Jordan’s role in the region and affirms IFC’s commitment to supporting its “ambitious” plans outlined in the Economic Modernisation Vision, Aftab said. 

The Jordan Times also spoke with Ethiopis Tafara, Vice President, Chief Risk, Legal & Sustainability Officer and Partnerships for the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA). 

Historically, MIGA’s main area of priority in Jordan has been investments in infrastructure projects, including Queen Alia Airport and Al Zarqa Power Plants, he noted. 

“Going forward, MIGA’s focus will be on supporting the realisation of current government priorities, including promoting public private partnerships (PPPs) in areas of renewable energy, water and education as well as infrastructure, through attracting foreign investors,” Tafara said. 

Facilitating public-private partnerships and foreign investments 

Tafara explained that MIGA’s role involves facilitating foreign direct investments in developing countries through addressing the “perception of risk”. 

He noted that these include political risks such as war and civil disturbance as well as risks related to breach of contract or expropriation by the government in addition to transfer restriction and currency inconvertibility. 

“Potential investors may sometimes be reluctant to invest in a given country because they perceive the political risk to be too high.” MIGA’s role is to address that perception and to provide a guarantee against the risk. 

MIGA also offers credit enhancement for lenders as protection against losses from the failure of state-owned enterprises to meet their financial obligations. 

The interviews with the officials were conducted on Monday following a series of roundtable discussions hosted by IFC and MIGA under the umbrella of “Promoting Foreign Direct Investment in Jordan and Iraq”. The event was attended by senior officials from both countries, CEOs of banks and businesspeople. 

Ethiopis highlighted key points addressed during these roundtable discussions, including foreign investors’ concerns and areas of interest as well as challenges that may impede PPPs, such as equilibrium in the allocation of risks and benefits between the investors and the government. 

The discussions also involved an overview of the various projects that the Jordanian government is seeking to undertake under PPPs, including the construction and development of 14 new schools and the Aqaba Amman Water Desalination and Conveyance Project (AAWDCP). 

Prioritising green projects and investments

Aftab said that IFC’s investments have been directed towards boosting Jordan’s domestic energy supply through renewable power. These include the Tafileh Wind Farm and the “Seven Sisters” project, which were both the first of their kinds in the region. 

Moreover, IFC recently signed a cooperation agreement with the Greater Amman Municipality to implement the Green Buildings project in Jordan, he added. 

Aftab further noted that the green finance market in Jordan holds “largely untapped” investment opportunities that can pave the road towards sustainable development. 

IFC is investing up to $50 million in Jordan’s first green bond, issued by the Jordan Kuwait Bank. The cooperation is also currently looking into working with Islamic banks in Jordan to launch the first green Sukuk, which are Sharia-compliant bonds. 

Tafara stressed that the World Bank Group strongly holds the view that climate change adaptation and mitigation factors in all projects it supports. 

“As a matter of policy, all of our projects have to be aligned with the Paris Agreement adopted in 2015, which means mitigating GHG emissions, and adapting to climate change,” he said. 

Tafara further affirmed that future projects supported by the World Bank Group will be marked by more concerted efforts among its constituent institutions. 

“We’re cognizant of the fact that helping with the development challenges that countries, including Jordan, face really requires that the institutions that comprise the World Bank Group work in an ever more coordinated fashion,” he said. 

Additionally, the officials highlighted the findings of Jordan’s 2022 Country Climate and Development Report (CCDR), which estimates that the Kingdom requires $9.5 billion in investments to achieve its goals in relation to resilient and low-carbon development by 2030. 

Aftab pointed out that private sector investments account for over 60 per cent of the identified “incremental” financing needs. PPPs offer a channel through which private climate-responsive capital investment can be leveraged, he added.

Jordan-Iraq nexus

Both officials agreed that the advancing nexus between Iraq and Jordan involves great opportunities for both countries. 

Highlighting the progress in relations, Aftab noted that a number of Jordanian banks have already established subsidies and branches in Iraq, including Jordan Kuwait Bank, Capital Bank and Arab Bank. 

Tafara said that MIGA is providing support for the financial institutions that are establishing branches in Iraq through covering political insurance concerns. 

There is also a progressing plan to establish an industrial city on the border of the two countries which will act as an economic corridor that will facilitate increased trade exchange and cross-border investments, Aftab added.

http://www.jordantimes.com/news/local/addressing-climate-change-water-scarcity-and-job-creation-world-bank-groups-top