While Jordan is moving towards an energy transition, renewable energy projects face formidable challenges that impede their progress.
As per the reports, the partnership between the public and private sectors, instrumental in driving substantial investments in renewable energy, has weakened due to a combination of factors. High government fees, particularly a tax of two dinars ($2.8) per kilowatt-hour of electricity produced, have added substantial financial burdens to investors.
Moreover, the frequent revisions of agreements between the government and investors have exacerbated uncertainties and eroded trust, hindering the sector’s growth.
Another critical issue is the scarcity of land allocated for renewable energy projects, which has led to inflated land prices and discouraged potential investors. The reluctance of the government to address this land allocation challenge has further hindered the expansion of renewable energy initiatives.
However, there are reports about the government’s proactive measures. To this end, the government has commissioned a consultancy firm to conduct a study to improve investment terms and purchase agreements for generated electricity, demonstrating a recognition of the need for reform. This study holds the potential to identify concrete solutions to address the obstacles currently impeding renewable energy investments in Jordan.
Jordan has attracted investments from both domestic and international entities in renewable energy projects. Public-private partnerships have played a significant role in financing and implementing renewable energy initiatives, contributing to the sector’s growth.
It can be said that Jordan has made significant progress and addressing the existing challenges through collaborative efforts between the government and private sector, backed by strategic reforms informed by the upcoming study, will play a pivotal role in unlocking the full potential of renewable energy in Jordan’s energy landscape.
