Jordan doubling Middle East PV capacity
Jul 7, 2014 - Heba Hashem - pv-insider.com
Energy-deprived Jordan is more than doubling the size of the regional energy
market with 600 MW of PV projects to be added to the grid by 2020.
Even beyond the government programme, opportunities abound as universities and
hospitals look to solar for power security.
Association (PHA), which represents 46 hospitals, proposed
to government authorities the establishment of a 15 MW PV plant
to provide electricity for hospitals across the capital Amman.
The plant is expected to lead to an immediate 20% drop in private
hospitals’ energy bills and PHA expects to recoup the
initial investment costs within a five-year period. But the
government has yet to respond despite an aggressive solar programme
in other parts of the industry.
Dependent on foreign imports for nearly all of its energy needs and burdened
with the influx of Syrian refugees, Jordan has set out on a multi-pronged
mission to end its vulnerability to the volatile fossil fuel market.
The plan saw the government set an ambitious renewable energy target of 7%
by 2015 and a goal to develop 600 MW of solar energy by 2020. Consequently,
it announced three rounds of solar projects, each comprising 200 MW.
Round 1 finalised
The first round of renewable projects has resulted in 12 consortia being
awarded PV projects at a total cost of $560m. Among the winners were the
First Solar Shams and the Ma'an Power Generation consortium with a 52.5 MW
project; Norwegian company Scatec Solar with a 10 MW project; and a consortium
led by Canada’s AMP Solar Group with a 20 MW project. Portugal’s
Martifer Solar and Dubai-based Adenium Energy Capital were also awarded a
10 MW project.
All winners have secured 20 year PPAs with Jordan’s National Electric
Power Company (NEPCO) – some of which will be built in Jordan’s
northern region of Mafraq, and others in the southern city of Ma'an.
The 12 projects are expected to be completed by early 2015 and in mid-2015
they will be connected to the grid,” the country’s energy minister
Mohammed Hamed told Jordan Times. “We have two remaining rounds under
which about eight renewable energy projects for power generation will be
Round 2 in progress
The second round of projects was launched in October 2013, inviting expressions
of interest from both PV and wind power developers. The government is now
in the process of choosing four companies out of 45 qualified local and international
firms to build 50 MW PV plants, which will be located in Mafraq.
MoUs have already been signed with these companies, and they have until July
6 to submit their technical and financial offers. Once these offers are received
by MEMR, they will be assessed by a specialised team and the four winning
companies would be announced by September 2014.
Jordan has just signed up several power purchase agreements for private developers.
It’s quite significant; it’s more than doubling the size of the
whole regional market on its own with this set of PV projects. These projects
provided returns that were attractive enough to get the attention of a number
of international investors,” Sami Khoreibi, CEO of UAE-based Enviromena
told PV Insider.
As the MENA’s largest PV EPC contractor, Enviromena made a move into
Jordan by establishing a new office there last April. “We as Enviromena
are participating (in the Jordanian solar market) as an EPC and O&M contractor,” Erik
Voldner, executive director of operations at Enviromena told PV Insider.
Round 3 takes a leap
Expressions of interest for the third and final round, which focuses solely
on PV projects, were invited in March 2014 with an increased maximum capacity
of 100 MW per project. Due to the larger capacity being offered, applicants
or nominated EPC contractors will have to meet higher criteria compared to
For instance, they must have designed, developed or constructed a project
with a minimum capacity of 50 MW that has been operational for longer than
one year, and another with a capacity of at least 20 MW that’s been
operational for over two years.
Moreover, evidence of raising sufficient debt and substantial equity participation – of
$30m as a minimum versus just $5m in the previous round – must be shown
in order to participate in this round.
And in contrast to the first two rounds, Round 3 does not expressly prioritize
project locations, which should allow for greater flexibility in land selection. “The
most important criteria for selecting the land is the capacity of the local
grid and distance to the interconnection point,” highlights Voldner.
Mafraq, one of the regions where several PV plants will be constructed, recently
halted the bidding process for land to give way to a new set of rules.
According to Mafraq Development Corporation, the new land bidding will involve
a rent payment scheme in which investors and developers will no longer be
required to provide a down payment prior to entering a PPA with the government.
This will address the fact that some investors and developers may not reach
the PPA execution phase, therefore reducing the possibility of them incurring
financial loss as a result.
It is worth noting that the government extended the EOI deadline for Round
3 twice, from 10 April to 15 May 2014 and then again to 14 August, 2014.
The reasons are not clear, although it’s most likely to allow additional
time for interested applicants to come forward.
Outside of the government’s renewable energy programme, the private
sector has been embracing solar energy as a way of escaping the soaring electricity
Last year, the Private Hospitals Association (PHA), which represents 46 hospitals,
proposed to government authorities the establishment of a 15 MW PV plant
to provide electricity for hospitals across the capital Amman. The plant
is expected to lead to an immediate 20% drop in private hospitals’ energy
bills and PHA expects to recoup the initial investment costs within a five-year
However, the association has yet to receive a reply according to Jordan Times,
despite the fact that hospitals in the country pay JD 0.259 per kWh ($0.365) – much
higher than the JD 0.160 that hotels pay and the JD 0.60 that factories pay
for the same consumption. It is also double the JD 0.113 that hospitals paid
Because hospitals cannot reduce their energy consumption by nature of their
critical operation, PHA has been studying alternative solutions and is now
considering hiking the fees of healthcare services for non-Jordanian patients.
The educational sector is also seeing the logic in solar. Al-Huson University
College, for example, plans to install generators with a back-up PV system
by 2015, with the tender to be floated in July this year. Although small
scale at 50-100kW, it reflects a new attitude by the private sector towards
All renewable energy plants in Jordan should be supplying the national grid
by 2018. These projects will significantly ramp up the country’s electricity
production capacity, which now stands at 3,200 MW.
Interestingly, solar PV has already reached grid parity in the country. While
domestic electricity production typically costs $0.19 per kWh, Martifer Solar
and Adenium Energy Capital’s signed their PPA at a tariff of $0.169,
and Enviromena claims it can comfortably produce PV energy at just $0.14.
The underlying economics show that there is an attractive enough payback
period for foreign investors,” says Khoreibi. “Our expectation
is that Jordan’s projects would be definitely under the 10-year return.”