Market Readiness Proposal for Jordan - the PMR Jordan_Market...HCST Higher Council for Science and...

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Market Readiness Proposal for Jordan Partnership for Market Readiness

For submission at the 14th Partnership Assembly, Peru, April 26-28, 2016

April 2016

Market Readiness Proposal for Jordan |

Table of contents

Background Information.................................................................................................... iv

Acronyms ............................................................................................................................ v

Introduction: PMR in Jordan – the Path to a Crediting Mechanism ............................... ix PMR in the Jordanian Context ......................................................................................................ix

1 The Big Picture: Socio-economic and Policy Context ............................................ 1 1.1 Macro context .................................................................................................................... 2 1.2 Climate change mitigation policy ....................................................................................... 5 1.3 Institutional landscape ..................................................................................................... 11 1.4 Key Policies, Regulation and Targets ............................................................................. 13

2 Path to a Market Based Instrument in Jordan........................................................ 19 2.1 Selection of a target area for PMR activities ................................................................... 19 2.2 Previous Experience with Climate Finance ..................................................................... 21 2.3 Key insights ..................................................................................................................... 23

3 Assessment of Technical and Institutional Market Readiness for an MRV Framework ......................................................................................................................... 24

3.1 Introduction to MRV systems .......................................................................................... 24 3.2 Data, MRV Registry/Tracking Tool .................................................................................. 26 3.3 Summary of key institutional and technical challenges ................................................... 29

4 Assessment of Private Sector Financial and Technical Market Readiness to Develop a Pipeline of Mitigation activities ...................................................................... 30

4.1 Status of the RE and EE markets.................................................................................... 30 4.2 The role of the public sector ............................................................................................ 34 4.3 Stakeholder Landscape ................................................................................................... 34 4.4 Key Challenges ............................................................................................................... 39

5 Addressing Institutional and Technical Challenges: Developing a Multi-tiered MRV Framework ................................................................................................................ 41

5.1 Key Challenges ............................................................................................................... 41 5.2 A multi-tiered MRV Framework ....................................................................................... 42 5.3 MRV Framework of Mitigation activities .......................................................................... 43 5.4 MRV Framework of Sectoral Emissions in pilot sectors ................................................. 49 5.5 Supplementary activities ................................................................................................. 53 5.6 Interactions between the two MRV Frameworks: reporting unit roles............................. 53 5.7 Axis A: Activity Timing and Costs ...................................... Error! Bookmark not defined.

6 Addressing Financial and Technical Challenges: Developing a Pipeline of GHG Mitigation activities ........................................................................................................... 55

6.1 Capacity building of JEF and JREEEF ............................................................................ 56 6.2 Climate Finance Capacity building programme .............................................................. 58 6.3 Partnership for Climate Action ......................................................................................... 60 6.4 Upstream policy analysis for alignment and coherence across Ministries ...................... 62 6.5 GHG verification training and accreditation for existing energy service consultants ...... 63 6.6 Registry of planned projects and potential support ......................................................... 64 6.7 Study of domestic market opportunities in Jordan .......................................................... 66

7 Organization, Communication, Consultation and Engagement ........................... 67 7.1 Stakeholder engagement for MRP development ............................................................ 67 7.2 Stakeholder analysis ....................................................................................................... 67 7.3 Roles and responsibilities for core MRP activities .......................................................... 69 7.4 Indicative in-kind contributions of key stakeholders ........................................................ 71 7.5 Project Management Unit ................................................................................................ 72


8 Summary of Schedule and Budget ......................................................................... 76

Annexes ............................................................................................................................... 1 A. Historic Emissions ............................................................................................................. 2 B. Projected Emissions .......................................................................................................... 4 C. Main Mitigation Activities and NAMAs ............................................................................... 5 D. Renewable Energy and Energy Efficiency Law, 2012 ...................................................... 9 E. Assessment of PMR Target Areas .................................................................................. 10 F. Renewable Energy and Energy Efficiency Projects and Programmes in Jordan ........... 12 G. Jordanian Banking and Microfinance System ................................................................... 1


April 2016 Page iv

Background Information

PMR Focal Points in Jordan

His Excellency Eng. Ahmad Al Qatarneh, Secretary General, Ministry of Environment

PMR Preparation Team/ Acknowledgements

PMR Preparation Team/ acknowledgements

Ministries

Ministry of Environment

Ministry of Energy and Mineral Resources

Ministry of Water and Irrigation

Ministry of Transport

Ministry of Finance

Ministry of Municipalities

Ministry of Planning and International Cooperation

Offices/Agencies

Greater Amman Municipality

NERC

Special Economic Zone Authorities

Hassan Scientific City/Drivers of Change Institute

Jordan universities

JSMO

Public Financial Institutions JREEEF

Jordan Environmental Fund

Private Sector Jordan Chamber of Industry, EDAMA

Non-governmental organizations

Jordan Environment Society, National Women’s Organization

International Cooperation EU Aid, EBRD, GIZ, USAID, UNDP, AFD, GGGI

Developed by:

Ricardo-AEA, UK

Royal Scientific Society Jordan

Greentech Jordan

SFW Ltd, UK

Ernst and Young


April 2016 Page v

Acronyms

List of Acronyms

ACC Agricultural Credit Cooperation

AFD French Development Agency

BOT Build-Operate-Transfer

CBO Community Based Organization

CBJ Central Bank of Jordan

CDM Clean Development Mechanism

DEF Development and Employment Fund

DFATD Department of Foreign Affairs, Trade and Development

DSM Demand Side Management

DMS Data Management System

DNA Designated National Authority

EBRD European Bank for Reconstruction and Development

EDAMA Energy Water Environment and Productivity - Jordanian Business Association

EDCO Electricity Distribution Company

EE Energy Efficiency

EIS Energy Information System

EPC Energy Performance Contract

ER Emissions Reduction

ERC Electricity Regulatory Commission

ESCB Energy Sector Capacity Building (USAID Programme)

ESP Energy Service Providers

ESS Environmental and Social Safeguards

ETS Emissions Trading Scheme

EU European Union

FDI Foreign Direct Investment

GAM Greater Amman Municipality

GBP Green Bonds Principle

GCC Gulf Cooperation Council

GCF Green Climate Fund


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GEF Global Environment Facility

GF Green Finance

GMU Green MRV Unit

GGGI Green Growth Planning and Implementation

GHG Green House Gases

GIZ Gesellschaft für Internationale Zusammenarbeit (German Agency)

GoJ Government of Jordan

HCST Higher Council for Science and Technology

IBRD International Bank for Reconstruction and Development

IDECO Irbid District Electricity Company

IPP Independent Power Producers

JAIMS Jordan Aid Information Management System

JCP Jordanian Competitiveness Program

JD Jordan Dinar

JEDCO Jordanian Enterprise Development Corporation

JEIS Jordanian Environmental Information System

JEPCO Jordan Electric Power Company

JEPF Jordan Environmental Protection Fund

JICA Japan International Cooperation Agency

JIEC Jordan Industrial Estates Corporation

JREEEF Jordan Renewable Energy and Energy Efficiency Fund

JSMO Jordan Standards and Metrology Organization

JUMP Jordan Upgrading and Modernisation Fund

JVA Jordan Valley Authority

KfW German Development Bank

KPI Key Performance Indicator

LULUCF Land Use, Land Use Change and Forestry

MBI Market Based Instrument

MDBs Multilateral Development Banks

MEMR Ministry of Energy and Mineral Resources

MENA Middle East and North Africa

MFI Private Microfinance Institutions


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MIT Ministry of Industry and Trade and Supplies

MoEnv Ministry of Environment

MoF Ministry of Finance

MoPIC Ministry of Planning and International Cooperation

MoPWH Ministry of Public Works and Housing

MoT Ministry of Transport

MRP Market Readiness Proposal

MRV Measuring, Reporting and Verification

MWI Ministry of Water and Irrigation

NAMA Nationally Appropriate Mitigation Actions

NCCCC National Climate Change Committee

NCCP National Climate Change Policy

NDA National Designated Authority

NEEAP National Energy Efficiency Action Plan

NEPCO National Electricity Power Company

NERC National Energy Research Center

NIE National Implementing Entities

NMSF New Markets Stimulus Fund

NMVOC Non-Methane Volatile Organic Compounds

NWIS National Water Information System

PD Project Developers

PDD Project Development Document

PFI Public Financial Institution

PPA Power Purchase Agreement

PV Photovoltaics

R&D Research and Development

RBF Results Based Financing

RE Renewable Energy

RSS Royal Scientific Society

SABEQ Sustainable Achievement of Business Expansion and Quality

SMSE Small and Medium Sized Enterprises

SWH Solar Water Heating


April 2016 Page viii

TNC Third National Communication

UNEP United Nations Environment Program

UNFCCC United Nations Framework Convention on Climate Change

USAID United States Agency for International Development

WAJ Water Authority of Jordan


April 2016 Page ix

Introduction: PMR in Jordan – the Path to a Crediting Mechanism

This document provides Jordan’s Proposal for Market Readiness.

PMR in the Jordanian Context

Globally, PMR priorities are to support implementing countries in achieving greenhouse gas mitigation by building local technical capacity and infrastructure for robust MRV of GHG emissions; designing locally relevant market based instruments (MBIs) and support for implementation.

PMR support has primarily focused on:

identifying and delivering capacity building of public sector stakeholders

assessing and recommending possible MBIs for implementing countries;

defining a roadmap for implementation of selected MBI, focusing heavily on public sector and

institutional arrangements required, including MRV;

communicating and engaging with private sector and non-government stakeholders in order

to implement these instruments.

In Jordan, stakeholders foresee the potential for a scaled crediting mechanism. The identification and design of a mechanism requires significant capacity development as well as robust institutional (MRV) framework for data collection. Accordingly, Jordan’s MRP involves extensive technical assistance and capacity building for the public and private sector and the development of a multi-tier MRV framework. This framework is expected to provide high-quality data on GHG emissions by sectors, sub-sectors and stakeholder groups, which will enable setting up of sectoral emission scenarios. Extensive engagement with the public and private sector stakeholders will be crucial to identifying potential MBIs, incentives for greater engagement and potential domestic sources of demand. Given Jordan’s socio-economic conditions and national priorities, this approach is deemed to provide the appropriate pathway to achieving PMR goals.

Key Mitigation Sectors

The greenhouse gas (GHG) emissions from Jordan (estimated to be 28.7Mt CO2e in 2006) amount to less than 0.1% of global emissions.1 Jordan is also addressing many economic and development challenges arising from its geography, history, geopolitics and scarce natural resources. In addition,

1 According to Jordan’s INDC 2015

Introduction – PMR in Jordan

Chapter 1 – The Big picture: Socio-economic and Policy Context

Chapter 2 – Path to a Market Based Instrument in Jordan

Chapter 4 – Assessment of Private Sector Readiness to Develop a Pipeline of Mitigation Activities

Chapter 7 – Organization, Communication, Consultation and Engagement

Chapter 8 – Summary of Schedule and Budget

Chapter 5 – Addressing Institutional and Technical Challenges: Developing a Multi-tiered MRV Framework

Chapter 6 – Addressing Financial and Technical Challenges: Developing a Pipeline of GHG Mitigation Activities

Chapter 3 – Assessment of Technical and Institutional Market Readiness for an MRV


April 2016 Page x

there has been a significant influx of refugees from neighbouring countries which have placed additional demands on its resources.

Jordan continues to be a regional pioneer in its Climate Change efforts. The Government of Jordan has made significant contribution to the global climate change mitigation agenda and regional adaptation priorities, despite Jordan’s small contribution to global GHG emissions and significant socio-economic challenges. Jordan created the National Climate Change Committee (NCCC) as early as 2001, and in 2013 launched its National Climate Change Policy, a road map for the 2013-2020 period. In addition, Jordan has recently launched a new national vision and strategy (Jordan 2025) which sets out long term policy goals for economic and social development. It is committed to making a contribution to global efforts to combat climate change and reduce GHG emissions and has recently submitted its Intended Nationally Determined Contribution (INDC) which sets an ambitious target of reducing its GHG emissions by 14% in 2030 compared to its baseline scenario, although this is conditional on international support.

Over 70% of Jordan’s GHG emissions arise from the energy sector (including transport). Jordan is heavily dependent on energy imports; importing 96% of its oil and gas, which accounts for 20% of its GDP. In order to improve energy resilience and combat climate change Jordan is aiming to increase its use of renewable energy and target improvements in energy efficiency in both the supply and demand side.

Most GHG savings are, therefore likely to arise in the energy sector. Furthermore, development of renewable energy and energy efficiency actions are priority areas which support Jordan’s development, economic and climate change strategies. This area has, therefore, been chosen to pilot the PMR activities. It will enable the PMR activities to build upon and coordinate the many diverse mitigation actions that Jordan is already undertaking, and has identified in the recent INDC. Moreover, since energy has cross-sectoral impacts, focussing PMR activities in this area, will allow the project, which will be led by The Ministry of Environment, to engage with several other ministries and public sector organisations (e.g. Ministry of Energy and Mineral Resources (MEMR), Ministry of Water and Irrigation (MWI), Ministry of Municipal Affairs (MoMA), the Greater Amman Municipality (GAM), Ministry of Planning and International Cooperation (MoPIC) and the Ministry of Finance) as well as private sector organisations This will enable the PMR implementation to have a wide reaching impact.

Challenges to developing a Market Based Instrument for Jordan

Jordanian stakeholders strongly support the implementation of a market mechanism, whether for projects, programmes or at a sectoral level. However, the lack of GHG data, MRV frameworks, and limited capacity of stakeholders poses a major barrier to design or implementation of an appropriate market based instrument appropriate for Jordan.

The challenge same can be said of the market readiness for accessing results based financing (RBF). RBF can be considered as a precursor to a crediting mechanism. Establishing market readiness for RBF will provide learning among the key market players and institutions, and lay the foundations for a future crediting mechanism.

This low level of readiness includes institutional and technical readiness, mainly among the key public sector bodies, and a lack of institutional frameworks. Equally however, these readiness challenges also exist within the private sector, which is endeavouring to deliver a pipeline of low carbon activities in renewable energy and energy efficiency. The key challenges include a lack of financial, technical, and human resources.

A final challenge is the uncertain future demand for credits which may be produced by a possible future market mechanism, whether at the international, regional or national level.

Private sector challenges

Jordan has a growing market of energy efficiency and renewable energy projects. Regulatory incentives are the main factor in generating demand for EE and RE projects in Jordan.

Regarding the energy efficiency market, Jordan has been phasing out energy subsidies since 2008, and income and sales tax exemptions on RE and EE projects and equipment are in place since 2012. The government has taken measures to mitigate the impacts of rising energy costs on households and businesses, particularly due to Jordan’s dependence on energy imports which are subject to volatile


April 2016 Page xi

market prices. More recently, Jordan intends to continue focusing on economic incentives for energy efficiency and stimulating a project pipeline through the national action plan. Measures also exist to develop the supply chain for the RE and EE industry, in addition to awareness raising campaigns and development of building codes.

Regarding the incentives for large renewable energy projects, in 2012 the Renewable Energy & Energy Efficiency Law (REEEL) fully opened the door for private sector participation in the electricity markets, and providing net-metering tariffs to encourage self-generation particularly among households. In summary, many of these regulatory incentives are relatively new, and in the process of being implemented. In addition, they are best suited for largescale projects. There is a continuing gap in demand generating from small to medium sized projects. While these demand side challenges are important, addressing them is not the focus of the PMR activities in Jordan.

Regarding supply side factors, the number of potential small-and-medium (SME) scale project developers is small, but growing. Project developers face a number of financial, technical, and legal challenges to delivering such projects. Jordan’s RE and EE markets are challenged by a lack of a diverse and mature pool of market actors capable of implementing such projects. The market of energy service providers (ESPs), who could play a very important role in developing and financing RE and EE projects, is small but growing.

Regarding financing of such projects, financiers similarly face a number of technical and legal challenges to providing financing. Such financial challenges are focused upon because of their alignment to PMR priorities.

Jordan is in the midst of a credit mismatch, with indicators revealing decreased access to credit (even though Banks are looking to lend) and unsustainably high public debt. Amongst the private sector, access to finance is particularly poor for SMEs: this is hindering the growth of potential new players, including the ESP market. This is compounded by the fact that existing project developers lack the core skills to access financing, for instance to the ability to prepare bankable loans requests.

The box below highlights some of the key challenges.

Numerous challenges are faced by the low carbon sector in Jordan including: technological, financial, and human resource capacity. Enabling financial flows by working with project developers (PDs) and financiers is the focus of private sector engagement through the PMR. While technological barriers and wider capacity building of PDs are important challenges, they are beyond the scope of this MRP, or are being addressed by ongoing government and donor activities, respectively. Where possible, PMR activities will collaborate with and complement such ongoing activities (e.g. JREEEF and USAID work with ESPs).

Results based financing can provide financial support to scaling-up GHG mitigation projects, such as in RE and EE sectors. In order for Jordan to attract the climate finance required for this sector, the fundamental lack of experience of the financiers, and lack of technical capacity of project developers and financiers to deliver RE and EE, must be addressed. Subsequently project developers and financiers can be introduced to the concepts and requirements of climate finance (e.g. project selection criteria, project baseline studies, project management and monitoring of GHG emission savings, verification of GHG savings.)

The role of the public sector and donor community in addressing private sector challenges

As mentioned earlier, Jordan identified a number of mitigation actions in its INDC and has set an ambitious target of 14%, which will require international funding and support if it is to be achieved. The public sector can play a pivotal role in catalysing investment in RE and EE projects, beyond the creation of regulatory incentives. Jordan is seeking to activate the role of governmental funds, such as JREEEF and JEF2, to promote early stage investment and generate a pipeline of projects, which will support in the de-risking such finance. They can also create familiarity with climate finance concepts among the private sector partners including financiers, PDs and verifiers. However, these funds require substantial institutional, technical and financial support in order to reach their full potential.

2 Jordan Renewable Energy and Energy Efficiency Fund, Jordan Environmental Fund


April 2016 Page xii

In addition, there are a large number of international donors acting in Jordan, including multi-lateral development banks (e.g. the World Bank, EBRD, EIB), aid organisations (USAID, AFD, GIZ) and other international organisations (UNDP)3 The donor community plays a very significant role in financing and supporting the government’s aims, through grants, guarantees, loans, as well as technical assistance, for renewable energy and energy efficiency projects. Local banks are usually the conduits for donor financing, which has the effect of increasing familiarity with RE/EE financing.

However, some of these institutions have voiced their concern over the fragmentation, and lack of visibility of the many ongoing projects in Jordan. 4 They are supportive of a public registry of projects which would allow transparency, better coordination of ongoing activities, and analysis of their cost effectiveness. In addition, these donors are particularly supportive of developing strong GHG MRV Frameworks to prove the effectiveness of their results based climate financing.

Institutional and technical challenges

The Climate Change Directorate (CCD) was established in 2009 to address climate change issues and establish appropriate policies. It is understood that the CCD requires capacity strengthening to enable it to effectively coordinate climate change policies, across key ministries and institutions in support of the National Climate Change Committee, which has recently been receiving institutional capacity building support.

Crucially however, there is a lack of data and robust institutionalised MRV Frameworks, to support informed Climate Change policy design, implementation and evaluation. Within key ministries, there is a lack of technical, human, and financial resources to develop robust MRV Frameworks for tracking the GHG savings of mitigation activities and emission reductions. Indeed, the targets set in Jordan’s 2015 INDC rely on 2006 data.

MRV Frameworks are required for tracking the progress of mitigation activity, enabling the analysis of cost effective GHG reductions, and informing mitigation policy making. In addition, an MRV Framework which monitors sectoral emissions in pilot sectors is required to verify effect of mitigation actions, identify key emitting sectors, and set targets.

The lessons learnt from Jordan’s experience with CDM included the need to significantly strengthen institutional frameworks and technical capacity in order to deliver a pipeline of verified mitigation activities. This included the need to develop a clear system for data gathering, systems to monitor and verify the effect of such mitigation activities and the need to enhance the capacities of decision makers in the public sector. In particular, strengthening of the CCD as the Designated National Authority (DNA) was identified.

Uncertain demand for credits; more promising picture for Results Based Financing (RBF)

At the international level, the future of the CDM market is still uncertain, although more promising after the Paris COP21 agreement. Prospects for voluntary, domestic or regional demand for Jordan are equally uncertain. Indeed, it is worth highlighting that Jordan emitted approximately 20Mt CO2e in 20005 and 28.7Mt CO2e in 2006, making the domestic market size extremely small in global terms. However, there are indications that domestic and international demand for credits could improve in the future, especially with a strong signal from Paris Agreement. Recognizing the future potential for an international regime, the World Bank Group is developing a results based financing fund for scaled-up crediting. The Fund will support large-scale crediting programs in developing countries at a national, subnational, sectoral or city-wide level, by providing payments for carbon credits.

However for Results Based Financing, there are more concrete sources of demand, particularly for projects being developed in the public sector in Jordan. Jordan specified the need for USD 5,158m in international climate finance in order to meet its conditional contribution6. This conditionality is also linked to tracking of the GHG impacts and the cost effectiveness of these funds. Development Partners have also recognized that more climate finance could become available for Jordan, if the right MRV

3 More details in chapter 3. 4 Roundtable with development partners held during the June mission to Jordan, included attendance of representatives from EBRD, AFD, USAID, UNDP, UNEP, GGGI, among others. 5 Jordan SNC, 2000 6 Jordan’s INDC, 2015


April 2016 Page xiii

Frameworks are in place.7 Indeed, governmental funds, such as JREEEF have been requested to establish MRV procedures in order to attract RBF.

The vision: path to a scaled crediting mechanism for Jordan

Recognising that Jordan is at an early stage in the market readiness journey toward a MBI, the first implementation phase of PMR activities address key challenges pertaining to MRV infrastructure and technical capacity.

Figure 1 indicates the path toward developing a crediting mechanism in Jordan, and the key long term aims (grey) i.e. those beyond the timeline of the 1st PMR Implementation Phase (1st IP) at each stage of the journey. In addition, it indicates the key building blocks (blue) for enabling Jordan to progress along this path, and how the PMR activities (axes, ordered A1-2 and B1-5) are designed to begin building these blocks during the 1st PMR implementation phase.

The PMR activities are split between Axis A and Axis B. These are:

Axis A activities: Addressing Institutional and Technical challenges - Developing a Multi-

tiered MRV Framework

Axis B activities: Addressing Financial and Technical Challenges - Developing a Pipeline of

GHG Mitigation activities.

Some of the building blocks activities can occur in parallel while others are sequential.

Building blocks 1a and 1b. Developing a strong pipeline of pilot activities in the Energy sector (renewable energy and energy efficiency projects) requires the development of climate finance skills among the project developers, financiers, and other intermediaries (e.g. energy service consultants providing GHG verification services) involved in delivering such projects.

This means that foundational capacity building activities for stakeholders involved in the delivery of these projects will be addressed by the PMR programme. It is indicative of the very early stage of market readiness faced in Jordan (particularly when compared to other PMR countries) that such activities are necessary. For instance, this will initially include training on “traditional” project financing topics which are not necessarily linked to climate financing. This is a necessary foundational step on the journey to accessing results based climate financing; building the capacity of stakeholders and collaboratively develop a possible future crediting mechanism.

Building blocks 2 and 3, the creation of a multi-tiered MRV Framework (both project and sectorial

level), and the creation of a public registry of planned projects, do not have to be implemented

sequentially. The creation of a MRV framework will enable:

Policy planning, through the creation of sectoral baselines, emission projections, and

target setting;

The verification of GHG savings achieved through mitigation activities;

• Identification of priority mitigation sectors going forwards

It should be noted that these activities will also enable public sector agencies to access results based financing as they implement MRV Frameworks to monitor the delivery of GHG mitigation activities, creating institutional learning which will be important for the development of a future crediting mechanism.

7 Roundtable with MBDs held during the June mission to Jordan, included attendance of EBRD, AFD, USAID, UNDP.


April 2016 Page xiv

Figure 1 – The path to a crediting mechanism in Jordan: required building blocks and focus of PMR activities

Axis B: Developing a

pipeline of GHG

mitigation activities

Axis A: Developing multi-

tiered MRV framework

Finance: Enabling access to finance by working with project developers

and financers is the focus of MRP activities. (Technology and general

capacity building are not). Key activities:

• B1. Capacity building of JEF and JREEEF

• B2 Climate Finance Capacity building programme

• B3. Partnership for Climate Action

• B4. Upstream policy analysis for alignment accross ministries

A1. MRV framework for

mitigation activities: Capacity

building of project developers and

verifiers, by developing in-depth

GHG studies of pilot projects

B2 & B3

B5. GHG verification

training and accreditation

for existing energy service

consultants collaborating w/

ongoing donor activity

B7. Study of domestic

market

A1. MRV framework of mitigation

activities, development of public

access project registry.

A2. MRV framework of emissions

in pilot sectors for verification and

planning GHG mitigation activities.

B6. Registry of

planned activities and

potential support for

Mitigation activities and

programmes

MRV framework of Mitigation

activities , know-how of climate

project/programme development.

MRV framework of emissions in

key sectors: sectoral baselines

and target setting

Private sector

momentum for low

carbon investment,

technical skills to

develop and verify

Mitigation activities

Be

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Pil

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hin

1stP

MR

im

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(1

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Project and

Sectoral baselines

Sectoral target

setting

MBI: PROJECT, PROGRAMME OR SECTORAL

CREDITING MECHANISM

MRV framework:

registry of project

and verified

credits

Demand for

credits

(national/int’l)

ST: capacity build PDs and financiers

MT: build number of accredited GHG Verifiers

LT: create strong pipeline of GHG Mitigation

activities able to access RBF

S/MT: capacity build community of PD, financiers, intermediaries

involved in RE/EE projects

LT: create a strong pipeline of similar low carbon projects

ST: Create the institutional framework for

attracting results based financing

MT: Enable government planning future

mitigation policy and target setting, and enable

Donor planning and coordination of activities

Finance TechnologyTechnical

capacity

Building block 1a. Development

of RE/EE projects

Baseline and

GHG studies

Monitoring &

Verification

Building block 1b. Climate

Finance skills

MRV framework of


(bottom-up)

Building block 2. A multi-tiered MRV framework

MRV framework of

sectoral emissions

(top-down)

Public registry of


Building block 3. Public registry of planned

activities and potential support

MT: delivery planned activities by matching to support

LT: Aggregation of projects into programmes

Scaled up programme and sectoral level results based

financing, including donor support

Identification of candidates for crediting activities

Beyond the 1st IPPilot activities initiated within 1st PMR implementation phase (1st IP)

Key: ST: short term aim / MT: medium term aim / LT: long term aim


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Rationale for activities: the “no regrets” path to a crediting mechanism

The main aim of the PMR activities are to initiate Jordan on the path toward establishing a crediting mechanism at a project, programme or sectoral level. This will be done by addressing the institutional and technical challenges through the creation of a multi-tiered MRV Framework, and private sector financial and technical challenges, through the development of a GHG mitigation project pipeline.

However, in the context of uncertain demand for crediting mechanisms, this will be done in a way which supports Jordan’s capacity to deliver GHG mitigation activities at present, while minimizing regrets of creating readiness for a crediting mechanism.

The proposed market readiness-related activities in Jordan are considered “no-regrets” because they are desirable and justified for purposes other than (but complementary to) the implementation of a crediting mechanism. In addition, they are mindful of the very early stage of market readiness currently faced in Jordan, and propose many foundational activities which are pre-requisites for building market readiness in the public and private sector.

Each of the PMR activities proposed contributes to one of the following complementary goals:

1. Strengthening capacity to plan, track and deliver mitigation activities, through the development of a multi-tiered MRV Framework, and a registry of planned projects and potential support.

2. Maximize potential co-benefits by increasing institutional and private sector momentum for low-carbon investment and strengthening stakeholder engagement in mitigation opportunities. This will be done by stimulating the pipeline of RE and EE projects in Jordan by addressing the lack of experience and technical capacity of project developers and financiers.

3. Enable access to results based financing. Jordan will focus on generating emission reductions that can be funded by RBF in the short/medium term before considering the possibility of transferring these emission reductions into compliance-recognized credits once there is adequate demand.

Table 1 below provides a summary of the key PMR activities, the rationale in proposing them, and the key stakeholders involved.


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Table 1- Summary of activities, rationale and key stakeholders involved

Activities and description No regrets rationale: aims complementary to crediting mechanism readiness

Key stakeholders

A: Addressing Institutional

and Technical

Challenges: Developing a Multi-tiered

MRV Framework

A1. MRV Framework of Mitigation activities (projects, programmes, and sectorial level)

An MRV Framework to track the progress, GHG savings, cost effectiveness, and support given to mitigation activities and programmes. Linked to a publically accessible project registry of mitigation activities. Institutional strengthening and integration by increasing inter-governmental cooperation, and mainstreaming CC issues.

Strengthening capacity to plan, track and deliver mitigation activities. Will provide the institutional capacity building, including core technical (data) components, and strengthen collaboration between key institutions.

Enable access to results based financing. Developing and institutionalizing a robust system for the quantification of project emissions and baselines, and GHG savings, in partnership with the private sector. Catalysing effect of creating a pipeline for private sector involvement in RBF including private sector verifiers, and capacity building of project developers.

Donors have indicated that public registry of activities will enhance their ability to track, plan, and provide RBF.

MoEnv – oversight and facilitation

Climate Change Directorate – system owner. Establishing methodologies and QA/QC of data (which will also be audited by a 3rd party).

JEIS - data compilation and storage

Monitoring and Assessment Directorate (MoEnv) support the CCD in data interpretation and calculation role.

Reporting units:

Information systems: Department of Statistics, Energy Information System, Environmental Monitoring Directorate, Water Information System, GAM Environmental studies and planning department

Project Implementing agencies: JREEEF, JEF, MWI, GAM, MOT, others.

A2. MRV Framework of emissions in pilot sectors

An MRV Framework to support the planning and tracking of mitigation activities in target sectors, and climate change target setting in key emission sectors.

Strengthening capacity to plan, track and deliver mitigation activities. This MRV Framework complements and enhances the MRV of mitigation activities, enabling the planning and delivery of mitigation activities in these sectors

• Verification of GHG savings achieved through mitigation activities

• Sectorial emission projections, target setting (readiness for a sectoral crediting mechanism)

• Identification of priority mitigation sectors B:

Addressing Financial and

Technical Challenges:

Developing a Pipeline of

B1. Capacity building of JEF and JREEEF Key activities include:

1. JEF Organisational development plan and operational support

2. JEF/JREEEF: Support for compliance with MRV requirements for mitigation

Maximize potential co-benefits by increasing momentum for low-carbon investment, through a pipeline of projects. Capacity building of these government funds to support their role of delivering mitigation activities. Enable access to results based financing Capacity building to establish systems to comply with MRV

JEF and JREEEF – specifying key capacity building requirements, receiving this capacity.

MoEnv – facilitate the capacity building for JEF.


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GHG Mitigation activities

activities, including developing studies with pilot projects.

3. JREEEF: Accreditation to the Green Climate Fund

4. JEF/JREEEF: Fundraising support

requirements. Supporting accreditation to sources of RBF. Pilot projects will be chosen to develop GHG studies, creating a pipeline for such activities. While the exact project is not yet decided, it could include projects from JREEEF, JEF or the MWI.

CCD – support in identifying capacity building requirements.

B2. Climate Finance Capacity building programme. Development of targeted capacity building programmes for project developers, financiers, in order to enable supply of and access to RE and EE finance.

Maximize potential co-benefits by increasing momentum for low-carbon investment and strengthening stakeholder engagement in mitigation opportunities. Enable access to results based financing. Enabling access to finance by working with private sector stakeholder and providing technical assistance specifically tailored to obtaining RBF climate finance.

CCD to hire a relevant private sector institution to implement the activities under the overall supervision of the CCD.

B3. Partnership for Climate Action

A Partnership for best practice sharing, idea generation and discussion. Aims to gather relevant stakeholders (financial and project development community) in order to discuss the creation of new financial instruments and policy initiatives to mobilise climate finance in Jordan, resulting in recommendations to financial and policy making community.

B4. Upstream policy analysis for coherence

Review key policy for coherence and contradictions, for instance the submission of direct proposal under the REEE Law versus the PPP law. Recommendation for amendment, if necessary.

Maximize potential co-benefits by increasing momentum for low-carbon investment and strengthening stakeholder engagement in mitigation opportunities. Clarifying and removing the apparent contradiction will remove a potential legal barriers to private sector involvement in RE projects.

CCD to tender out this consultancy assignment to a relevant legal expert.

B5. GHG verification training and accreditation for existing energy service consultants

Support the creation of new GHG verifiers by providing training and support for

Enable access to results based financing. Providing technical assistance to existing energy experts to perform the role of GHG verification, thereby enabling project developers to access RBF. Importantly, this

CCD to tender out this consultancy assignment to a relevant international private sector institution, for capacity building purposes.


April 2016 Page xviii

accreditation of existing energy service consultants in Jordan. This activity will be subject to demand and opportunities to collaborate with ongoing activities for energy service provider market development.

activity will be developed in collaboration with ongoing donor initiatives.

CCD to provide input and guidance for training and accreditation.

B6. Registry of planned projects and potential support

Primarily a governmental planning tool, enabling identification of planned mitigation activities requiring and potential sources for this support. Publically accessible registry will also allow international donors to use this tool for planning and coordination.

Maximize potential co-benefits by increasing momentum for low-carbon investment. Allow the identification and aggregation of projects, facilitating scaled up financing by donors and other investors. Strengthening capacity to plan, track and deliver mitigation activities. Governmental planning tool, also allow international donors to use this tool for planning and coordination.

CCD, MoF, MoPIC, joint system owners.

NCCC identifies key planned projects.

MoPIC - mapping of planned projects and support.

JAIMS and JEIS – role as data compilation and storage (to be confirmed).

MoPIC and CCS to verify data, QA/QC (which will also be audited by a 3rd party).

MoF PPP unit –mapping of support.

B7. Study of domestic market opportunities in Jordan

These analytical studies will be conducted in partnership with the private sector to identify potential sources of domestic demand and its characteristics.

Study to identify sources of domestic demand for credits originating from the scaled crediting mechanism in Jordan.

CCD to tender out this consultancy assignment to a relevant expert, to be conducted in consultation with the private sector.


April 2016 Page xix

Timeframe for PMR activities: 1st PMR implementation phase and beyond

The first PMR implementation phase builds the market readiness required of both the public and private sector, to implement a crediting mechanism at the project, programme or sectorial level.

Pilot phase: focusing in on selected projects and stakeholders in priority (pilot) sectors

Activities in the 1st implementation phase will focus on a subset of GHG mitigation activities – specifically, renewable energy and energy efficiency projects – since these are defined as the priority activities addressing the dual aims of mitigation and energy security, and PMR resources are limited.

The same logic applies to the stakeholders involved in the initial phases of PMR implementation. In particular regarding the MRV frameworks, the initial phases will seek to include public and private sector stakeholders involved in delivering RE and EE GHG projects and measuring emissions in the associated sectors.

Where possible, efforts are made to disseminate learning to stakeholders not involved in the pilots, to support scale-up in subsequent phases.

The table below describes the activities to be implemented in the 1st PMR implementation phase, and in subsequent phases. Although the exact timeline can only be estimated, it is envisaged that around two additional 3 year implementation phases will be required.

Table 2 – Timeframe for achieving aims of the PMR activities

PMR activities 1st PMR implementation phase Subsequent implementation phases

A1. MRV Framework of mitigation activities (projects, programmes, and sectoral level)

Creation of institutional frameworks and procedures for M, R, V project level GHG reductions Building MRV capacity within key institutions: the CCD and selected public implementation agencies (priority to those in target areas), Project level capacity with 2-3 selected pilot projects within RE and EE, where full GHG reduction studies will be developed

Population of the project registry with GHG reduction data of these 2-3 projects, online publication

The development of a by-law to establish the legal mandate for the institutional framework is envisaged to be necessary only in subsequent phases.

Testing processes and procedures, supporting the roll out and improvement of the institutional framework.

Continuing to support and capacity build of key institutions, and possible widening of implementing agencies involved

Support in the access to RBF for such public sector mitigation activities, including through selection of further pilot projects for development of such studies, and population of the registry

Tracking of progress of ongoing projects

Analysis of the cost effectiveness of GHG reductions of ongoing projects

Planning: government and donors perspective

Development of a web-based project registry.

A2. MRV Framework of sectorial emissions

Creation of institutional and IT frameworks for the M, R, V of emissions at sectoral level within selected target sectors (e.g. Energy, Water, Municipalities).

Creation of a data management system – integration of existing systems, and development of


Testing processes and procedures, supporting the roll out and improvement of the institutional and IT frameworks.


April 2016 Page xx

procedures for collection, interpretation and storage

Capacity building of the key institutions: CCD, information systems (data providers), on reporting and conversion of activity data to emissions Updating of sectoral emissions data for pilot sectors

Supporting governmental planning: assistance in interpreting the data, projecting baselines, setting targets, and planning policy.

Enhanced IT solutions: improving the integration of existing systems, developing automatic systems for data sharing and exchange.

Establishing regular procedures for monitoring and verifying emissions in pilot sectors

Expanding the scope of emissions MRV beyond that of target sectors, to account for all economic activity

Continued governmental planning support, verification of impact of mitigation activities, identification of priority mitigation areas

B1Capacity building of JREEEF and JEF (governmental funds)

JEF: Develop a new business (fundraising and operational) development plan in line with GHG mitigation agenda, create systems for project and proceed management (including MRV), and support at least one project funding round.

JREEEF: creation of MRV Framework and processes for ongoing and future projects. Support GHG reduction study of at least one of JREEEFs projects as a pilot. Support GCF accreditation, and strategies for continued fund raising.

JEF: Implementation of business plan, creation of guidance and systems (e.g. IT) project/proceed management, support in obtaining additional funding.

JREEEF: Continued accreditation support, and continued in subsequent phases, execution of fund raising support.

B2. Climate Finance Capacity building programme

Establish the capacity building programme and Partnership with key stakeholders: project developers, financiers, intermediaries

Focus on capacity building and idea generation. “Traditional” and climate financing, with more focus on the former expected initially.

Support in accessing results based finance.

Creation of guidance materials

Further capacity building on climate finance skills, to enable access to RBF.

Shifting emphasis from capacity building to knowledge sharing among key practitioners, updates on trends and barriers in the market.

Publication and updating of guidance materials B3. Partnership

for Climate Action

B4. Upstream policy analysis for coherence

Investigation of apparent contradiction between these laws, which may be a barrier to IPP project proposals.

Recommendation for amendment/clarification of the law is expected, in order to remove this potential barrier.

n/a

B5. GHG verification training and accreditation for existing energy service consultants

These activities are expected to be back loaded in the 1st PMR implementation phase.

Intention is to reach-out and collaborate with ongoing training of energy service providers, with a specific focus on verification training.

Development of a private sector accreditation system for verifiers in Jordan. Can dovetail with ESP accreditation systems.


April 2016 Page xxi

B6. Registry of planned projects and potential support

This activity is also back-loaded in the 1st PMR implementation phase. Initial focus will be reaching out to all key stakeholders (MoPIC, MoF, donor community) to allow the mapping of future projects and support.

Extension of existing IT platforms for the creation of a public, web-based registry of planned projects and support

Publicising the registry

Capacity building to allow the integration of the registry as a tool for government planning.

Dissemination of the registry among the donor community, inviting updates.

Engagement with donors and government to identify candidate projects for aggregation, and scaled up financing, integrated in the MRV Framework.

B7. Study of domestic market opportunities in Jordan

The studies will be fully developed in the 1st IP.

Ensuring the sustainability of PMR activities going forwards

In order to mitigate the risk that additional funding may not be available, a number of measures have been taken in designing the MRP activities.

Fundraising for future implementation phases

A key activity of the PMU will be to fundraise to ensure the continuity of PMR activities in subsequent implementation phases. While PMR funding will be prioritised as a potential source of additional funding for subsequent phases, supplementary sources of funding may also being sought. Activities such as the development of a registry of planned projects and potential support for mitigation programmes, are expected to be of value to other donors operating in Jordan in climate related activities.

As donor committee will be formed as part of the project, the PMU will continually engage with this committee to identify possible future funding streams for activities complementary to PMR objectives.

Focus on capacity building and lasting frameworks

The MRP activities have been designed to focus on capacity building and development of institutional frameworks in order to enable these activities to sustain themselves.

The majority of activities contemplated in Axis A and B have a strong capacity building

component, providing public and private sector stakeholders with the skills to learn and

continue to perform the activities envisaged beyond 1st IP. This is true of activities involving

the CCD, JREEEF and JEF.

Particularly for the MRV activities, the focus during the 1st implementation phase is to lay the

institutional ground work which will enable self-sustaining activities going forwards.

The use of a piloting approach means that a sub-group of sectors and stakeholders have

been selected as the focus for involvement in the 1st IP. Focusing on these this sub-group first

ensures that stakeholders involved receive complete capacity building in the 1st phase, and

are then able to disseminate this knowledge themselves going forwards. Examples include

the project developers and verifiers who will participate in project level capacity building in the

1st IP, and can continue to do so thereafter.

Innovative business models

In some cases business models can be elaborated to enable continuity of activities. Activities like the Climate Finance Capacity building programme and Partnership are expected to add significant value in training private sector participants. A business model could be developed going forwards on the basis of paid membership, to ensure it is self-sustaining. The same could be true of activity B5 - GHG verification. The development of a business model will explored as part of the MRP activities.


April 2016 Page xxii

MRP structure The PMR’s MRP template has been adapted to enable the assessment of Jordanian readiness and definition of proposing activities. The table below illustrates how the original building blocks have been adapted to this MRP.

Chapter MRP Building Blocks

Introduction – PMR in Jordan - the path to a crediting mechanism

The Introduction establishes the vision for preparing Jordan for the adoption of such an MBI in the future. While Jordan has indicated a desire to develop a crediting mechanism, it is at a very early stage of institutional, technical and market readiness.

Chapter 1 – Big picture: socio- economic and policy context

BB1 – Policy Context, development and overall mitigation objective, present its emissions trends, explain key drivers for emissions, describe the status and plans for undertaking mitigation actions and meeting climate change mitigation


BB2 - Target Area assessment

Rationale for the selection of the Target Area to be covered by the market instrument(s).

Assessment of target areas - interactions of various policy instruments, or barriers for implementation

Suitability [or lack thereof] of using a Market Based Instrument for the Target Area

Chapter 3 – Assessment of Technical and Institutional Market Readiness for an MRV Framework

BB3 – Assessment of technical, institutional and regulatory readiness: (i) Data; (ii) Target Setting; (iii) MRV; (iv) Registry/Tracking Tool; and (vi) Regulatory and Institutional Framework.

Chapter 4 – Assessment of Private Sector Financial and Technical Market Readiness to develop a pipeline of mitigation activities

New section

Chapter 5 – Addressing institutional and technical challenges: Developing a multi-tiered MRV Framework

New section

BB4 – Planning for a Market Based Instrument.

BB5 – Identification of capacity building requirements

Chapter 6 – Addressing financial and technical challenges: Developing the pipeline of GHG mitigation activities

New section

BB4 – Planning for a Market Based Instrument.

BB5 – Identification of capacity building requirements Planning and developing a communications strategy


BB5 - Organization, Communication, Consultation and Engagement

Organization and coordination of the PMR

Plan(s) of consultative and engagement process among relevant government agencies and stakeholders


BB6 - Summary of Schedule and Budget, Full suite of activities

to achieve market readiness, identifying capacity building and

financial resources needed to accomplish these activities


April 2016 Page 1

1 The Big Picture: Socio-economic and Policy Context

This chapter summarises the overall context in which Jordan is making this proposal, specifically:

Macro context

o Jordanian Socio Economic Context

o Energy Sector Profile

o Water Sector Profile

Climate change mitigation policy

o Climate Change Policy and Development Objectives

o Historic and Projected Emissions and Mitigation Scenarios

o Mitigation Scenario

o Intended Nationally Determined Contribution

o Overview of key policies and actors implementing mitigation activities

Institutional landscape

o National Climate Change Committee

o Ministry of Environment

o Ministry of Energy and Mineral Resources

o Ministry of Water and Irrigation

o Greater Amman Municipality (GAM)

Key policies and challenges

o Key Policies, Regulation and Targets (introduction & diagram)

o Renewable Energy Policy

o Energy Efficiency Policy

o Key challenges

Key insights from this Chapter and Chapter 2 are drawn together at the end of Chapter 2. Key Challenges from this Chapter and Chapter 2 are drawn together at the end of Chapters 3 and 4 respectively.











April 2016 Page 2

1.1 Macro context

1.1.1 Jordanian Socio Economic Context

Jordan is an upper middle income country shaped by its geography, history, geopolitics and scarce natural resources. Located in the Middle East, it is bordered by Saudi Arabia, Iraq, Syria, Israel and Palestine (Figure 2).

Figure 2 – Map of the Jordan and surroundings

The overall population of the country is around 6.5 million (6.3m in 20138); the greater Amman area has a population of 2.8 million (~43% of Jordan’s population). In addition, since 2011, there has been a significant increase in the population due to refugees (it is estimated that the total number of Syrians in Jordan is 1.4m9). The influx of refugees is placing additional strains Jordan’s scarce water and energy resources and has put pressure on waste management, transport and other services which impact on the quality of life.

Jordan is a moderately competitive, open economy that depends highly on energy and commodity imports as well as receipts from tourism, remittances and international aid.10 Jordan imports a substantial fraction of its agricultural products, and is exposed to price volatility in these markets.

External Shocks to the Economy

Two successive external shocks - the global recession and the regional turmoil that followed the Arab Spring - have exacerbated Jordan’s long-term structural vulnerabilities. Following the global financial downturn of 2008, growth decelerated sharply. Turmoil throughout the region further undermined Jordan’s outlook, which led to (i) slower growth and lower fiscal revenues, and (ii) initially, increased public spending to partly accommodate social pressures. This has resulted in an accumulation of a large public debt, the servicing of which, exacerbates fiscal pressures. In particular, interruptions in the Egyptian natural gas supply, which in 2009 fueled about 90 percent of Jordan’s power generation, forced the country to increasingly rely on more expensive and less efficient diesel and heavy fuel oil (HFO) during a time of high oil prices. The Government’s initial decision not to pass-through the higher fuel costs to final consumers resulted in a significant increase in the National Electricity Power Company’s (NEPCO) operating losses. As a result, NEPCO has been running deficits equivalent to around 4-5 percent of gross domestic product (GDP) per year since 2011 and has accumulated total operating losses of about JD4.7 billion by end of 2014, for which debt servicing has until recently been directly covered by the budget. As a result, gross public debt has risen rapidly and is estimated to have reached around 90 percent of GDP at the end of 2014. Further budgetary losses equivalent to 1 percent of GDP were added in 2012 by the water sector because costs were not fully recovered in the sector, and the increased dependence on high cost technologies to make water available.

8 Jordan 2025: A National Vision and Strategy, 2015 9 Hashemite Kingdom of Jordan, Intended Nationally Determined Contribution, 2015 10 Vivid Economics Report Study of mechanisms to incentivize the financial sector to scale up financing of green investment in Jordan, 2013


April 2016 Page 3

The Government consequently has embarked on a major program aimed at strengthening its macroeconomic framework. Policy measures within the framework of the International Monetary Fund (IMF) Standby Arrangement (SBA)1 and the World Bank financed Second Programmatic Development Policy Loan2 have already achieved a significant reconfiguration of fiscal policies, improvements in the business climate, and a broadening of the revenue base. The unsustainably high cost of energy subsidies has led the Government to embark on a major subsidy reform program supported by the IMF SBA which, in November 2012, completely eliminated subsidies on petroleum products (except for Liquefied Petroleum Gas (LPG) cylinders mainly used for household cooking). The Government is also implementing a five year electricity tariff adjustment plan that aims at enabling NEPCO to reach full cost recovery by 2017. To promote energy security and reduce cost of electricity supply, the Government is also seeking to diversify its energy sources by scaling up renewable energy and developing a Liquefied Natural Gas (LNG) terminal in Aqaba, which became operational in July 2015. In addition, the Government is implementing a Structural Benchmark Plan which aims to achieve operation and maintenance cost recovery in the water sector by 2020 through a combination of revenue increases and cost reductions.

While the IMF-supported program has addressed fiscal pressures caused by the energy and water sectors, it is critical for Jordan to implement broader policy and structural reforms to sustain economic growth, despite the temporary relief arising from the fall of oil prices. The economy in Jordan is expected to grow at about 4 percent annually, which will increase electricity and water demand at average annual rates of 6 and 5 percent respectively. This high rate of growth puts further stress on public resources, especially if the underlying fundamental stress factors in these sectors are not addressed and systems are not optimized. To that end, key elements of the Government’s efforts focus on the restoration of the financial viability of sector utilities, in particular NEPCO - the backbone of the electricity sector - and on improving the operational performance of the energy and water sectors through efficiency gains.

Source: World Bank. 2015. Jordan - First Programmatic Energy and Water Sector Reforms Development Policy

Loan Program Project. Washington, D.C.: World Bank Group. (approved September 2015)

http://documents.worldbank.org/curated/en/2015/09/24982510/jordan-first-programmatic-energy-water-sector-reforms-development-policy-loan-program-project

According to the “Jordan Economic Monitor” report (2015), Jordan’s real GDP growth rate is estimated to have reached 3.1% in 2014, up 30 basis points over 2013 despite the hardships the economy suffered due to spill overs arising from the Arab Spring.11 The government is currently experiencing: a decrease in unemployment due to a drop in the labour force participation rate; a reduced gap in the current account due to robust public and private receipts; and a rapid deceleration of inflation. According to Jordan 2025 the current public debt to GDP ratio is 81% and the government budget deficit is unsustainably high, at about 8.3% of GDP.

Jordan 2025 sets out a path for the future. It defines an integrated economic and social framework that will govern the future economic and social policies. Until 2025, the baseline scenario aims to achieve a growth rate of 4.8% while the targeted scenario intends to “achieve real economic growth rates of about 7.5% in 2025 at a rate of 5.7% within the vision period”. During this period the debt to GDP ratio is anticipated to be reduced to 47%.

1.1.2 Climate Change Profile of the Energy Sector

As described above, Jordan’s energy sector has undergone major structural transformation since 2011 and it is likely that GHG emissions from the sector have also seen a major fluctuation. Following the drop of imports of natural gas from Egypt via the pipeline, which had fuelled most of the electricity grid, Jordan reverted to diesel and heavy fuel oil to ensure the same level of service. However, Jordan also continues to implement a number of major reforms to address its fiscal and energy challenges, including full liberalization of fuel prices over time, a gradual, ongoing increase in electricity tariffs, the construction of infrastructure to import natural gas from ships, and the introduction of a number of measures to attract private capital into renewable energy. The current GHG emission profile of the Energy sector is likely to be significantly different from the 2011 figures reported in Jordan’s Third National Communication and used throughout this proposal.

11 Jordan Economic Monitor: Persisting forward despite challenges. The World Bank. Spring 2015.




April 2016 Page 4

According to Jordan’s Third National Communication to the UNFCCC, in 2011, the overall demand for primary energy was about 7,457 thousand TOE, representing an increase of 1.4% compared to the 2010’s demand, whereas total demand for final energy (energy available to consumers) had increased by 0.3% compared to the 2010 demand levels. The demand for oil products was 3,593 thousand toe12. Even though Jordan has limited local energy resources, in particular resources of crude oil and gas, the current energy mix is heavily weighted in favour of these resources which constituted 93.9% of the total energy mix in 2011.

Figure 3 shows the distribution of the energy mix in 2008 and 2015 forecast. In 2008, 4% was domestic, and 96% imported.

Figure 3 - Composition of the energy mix in Jordan, 2008 and 2015 (E)13

Between 2011 and 2013 there were several explosions of the Egyptian pipeline. This pipeline supplies Jordan with a substantial amount of natural gas, these incidents brought about a significant drop in imported gas and forced a switch from natural gas to crude oil (increasing its contribution in mix by approximately 7% between 2010 and 2011). This also increased the cost of electricity generation.

The Jordanian energy sector is overseen by the Ministry of Energy and Mineral Resources (MEMR). The energy policy of the Government of Jordan (GoJ) was shaped through the adoption of the Updated Master Strategy of Energy Sector in Jordan for the period 2007-2020. Energy consumption is forecast to double from 2007 to 2020.

The goals of energy strategy are to diversify the sources of energy, increase the share of local sources in the energy mix, to reduce the dependency on imported oil and enhance environment protection. This will be achieved through maximizing the utilization of domestic resources (oil shale, natural gas, etc.), expanding the development of renewable energy projects, generating electricity from nuclear energy and the promotion of energy conservation and awareness.

1.1.3 Climate Change Profile of the Water Sector

The water sector is managed by various public entities namely, Ministry of Water and Irrigation (MWI), Jordan valley Authority (JVA), Water Authority of Jordan (WAJ), and Program Management Unit (PMU).

Jordan ranks as the one of the poorest 10 countries in the world on the basis of water availability per person. Scarcity of water is considered the most important constraint to growth and development.14 Water abstraction, distribution, use and conservation are major issues in the country. Table 3 shows that the majority (53%) of water consumed in Jordan is used in the agricultural sector, for irrigation. Municipal use, mainly for the residential and SMSE sector, accounts for 42%, and very little is consumed by the industrial and tourist sector (5%).

12 MEMR, 2012 13 Jordan TNC, 2014 14 Organizing framework for scoping of PMR Activities for Jordan, Presentation 11 May 2012


April 2016 Page 5

Table 3 - Water use in Jordan by sector15

Activity Proportion of water use

Irrigation in Jordan Valley 42%

Highland irrigation 36%

Municipal use 17%

Industrial use 4%

Tourist use 1%

In Jordan, centralised pumping stations distribute water around the country, usually with several water sources feeding the same networks. Water distribution across the country is crucial but poses great challenges: water pumping stations are outdated and function poorly, consuming unnecessary amounts of energy, and leaking water.16

The water sector is one of the largest electricity consumers in Jordan, accounting for 14% of Jordan’s total electricity consumption. Energy accounts for 40% of the Ministry of Water and Irrigation’s water sector budget. Industry representatives report that there are many energy efficiency opportunities in the water sector, for example pump replacements, with pay-back periods of just two to three years (under conditions when water use is priced at cost). 17

MWI’s Energy Policy 2015 is aimed at optimising energy use in the water sector, financial restructuring through improving cost recovery, utilising alternative energy sources, and improving efficiencies. This policy puts into effect the mandate of the Ministry of Water and Irrigation (MWI) to improve the performance of the water sector through

1. Improving the energy efficiency in water facilities in order to decrease the specific power consumption for water supply (4.175 kWh/cm billed in base year 2013 to 2.42 in 2025) and

2. Introducing renewable energy technologies to protect the environment and reduce energy price volatilities in the water sector.

The energy targets of MWI for the year 2025 are specifically

1. Reducing the overall energy consumption in public water facilities by 15%, and

2. Increasing the share of renewable energy to 10% of the overall power supply.

To achieve these targets, an action plan18 is being devised which will set three main milestones within this policy for the years 2017, 2021 and 2025.

Efforts have been made to increase private sector involvement. At the moment, investment decisions remain with the Water Authority of Jordan (WAJ) who do not use commercial banks for financing the investments. However, incentive-based contracting on performance output and Build –Operate-Transfer (BOT) contracts are also in place. There is significant focus on implementing EPC (energy performance contracts) through ESCOs in the water sector.

1.2 Climate change mitigation policy

1.2.1 Climate Change Policy and Development Objectives

Despite being a small emitter of GHG, Jordan is committed to implement appropriate UN conventions, having ratified the Kyoto Protocol in 1993. It was the first non-Annex I country of the UNFCCC to produce its Initial National Communication Report (NC) in 1997, its second in 2009, and the third in

15 Sources: MWI, Jordan Water Sectors Fact and Figures 2013t 16 http://www.waterworld.com/articles/wwi/print/volume-26/issue-4/editorial-focus/energy-management/pump-efficiency-gains-help.html 17 Vivid Economics Report Study of mechanisms to incentivize the financial sector to scale up financing of green investment in Jordan, 2013 18 MWI, National Water Plan, http://www.mwi.gov.jo/sites/en-us/SitePages/National%20Water%20Plan.aspx

http://www.waterworld.com/articles/wwi/print/volume-26/issue-4/editorial-focus/energy-management/pump-efficiency-gains-help.html

http://www.mwi.gov.jo/sites/en-us/SitePages/National%20Water%20Plan.aspx


April 2016 Page 6

2014. In addition, a National Environmental and Economic Development Study (NEEDS) for Climate Change was developed in 2010.

These activities are all organised under the Ministry of the Environment (MoEnv) as the focal point for climate change in Jordan. In 2013 the MoEnv launched the national climate change policy (NCCP) for 2013-2020 19 . The NCCP was developed in the context of a drive for sustainable economic development in the face of serious resource constraints. Mitigation in the energy sector, through the development of energy efficiency and renewable energy projects, emerged as a priority for Jordan. This is driven by the triple aims of:

Reducing GHG emissions in a cost effective manner,

Achieving energy resilience by reduced import dependency, on dual pillars of developing domestic renewable resources and encouraging energy efficiency.

Achieving sustainable development by managing resource scarcity to provide for a growing population and economy.

Figure 4 below, highlights Jordan’s goal to develop mitigation activities that supports this triple aim.

Figure 4 - Priority mitigation actions producing GHG reductions while meeting energy security and sustainable economic development goals

1.2.2 Historic and Projected Emissions and Mitigation Scenarios

In 2000, Jordan emitted approximately 20Mt CO2 eq, representing only 0.01% of global emissions20. In 2006, Jordan emitted 28.7Mt CO2 eq. An analysis conducted in 2010 showed that Jordan’s bulk share of GHG emissions represented only 0.06 % of the global GHG emissions21. At current emissions growth rate (3%), emissions will quadruple by 2050.

According to the Third National Communication (TNC) published in 2014, as shown in Figure 5, the energy sector is the most important emitter in 2006, accounting for 72% of emissions. It is expected to remain the largest emitting sector in future. The second largest source is Waste, accounting for only 11% percent, and relatively small quantities from Agriculture, LULUCF and Industrial Processes.

19 The National Climate Change Policy of the Hashemite Kingdom of Jordan 2013-2020 20 Jordan SNC, 2000 21 Hashemite Kingdom of Jordan, Intended Nationally Determined Contribution, 2015


April 2016 Page 7

Figure 5 – Share of various sectors in the total GHG emissions for selected years in the BAU scenario22

Note that net energy refers to net emissions from the energy sector, and IP refers to emissions from industrial processes. Energy sector emissions will increase from 72% in 2006 to 80% of total emissions in 2040 whereas the waste total’s share of GHGs emissions is set to decrease from 11% to 9%. Emissions from the other sectors emissions will continue to contribute very little to Jordan’s overall emissions, which is why there is continued focus on the energy sector. Annex A and Annex B provide further detail on Jordan’s historic emissions and projected emissions.

Emissions within the energy sector for 2006 are broken down by source in Table 4. Energy industries and transport are the leading emitters in the energy sector contributing 38% and 23% respectively.

Table 4 - Estimate of emissions by sub-sector for the base year 200623

Energy sector Mt CO2 eq. % energy sector emissions

% total emissions

Energy industries 7.916 38% 28%

Transport 4.706 23% 16%

Other (commercial, residential, agricultural) 2.883 14% 10%

Others 2.715 13% 9%

Manufacturing industries 2.,675 13% 9%

Total energy sector emissions 20.895 100% 74%

Total emissions 28.717 74% n/a

1.2.3 Mitigation Scenario

A total of 43 GHG mitigation activities have been proposed which, if they are all successfully implemented will lead to GHG emissions reductions of about 3.540 Mt CO2 eq. per year in 2020 and 5.176Mt CO2 eq. per year in 2040. The TNC undertakes a cost-effectiveness analysis of mitigation actions, shown in Figure 6.

22 Jordan TNC, 2014 23 Jordan TNC, 2014


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Figure 6 – Marginal abatement cost for all mitigation measures grouped according to sectors24

The marginal abatement cost curve (MACC) shows that most economically feasible options for GHG mitigation are in the energy efficiency, renewable energy, and primary energy25 sectors, including energy efficiency in the water sector with unit costs of between -13 to -274 JD/tCO2

26.

Focusing on the EE and RE projects will enhance sustainable development, reduce dependence on imported energy especially in light of increased energy prices, minimize energy cost to the economy, while creating new employment; all while improving the local environment27. Actions with negative abatement costs are show in Table 5 .

Table 5 – Examples of mitigation actions included in the TNC

Renewable Energy Energy Efficiency

Solar Water Heaters in 90 000 Houses

Photo Voltaic (PV) 200 MW (X2)

150 MW Wind Farm

300 MW Concentrated Solar Power (CSP)

Street Lighting: Replacing 200,000 125 W Mercury lamps with 70 W high Pressure Sodium lamps

Replacing 100,000 Fluorescent lamps fixtures with LED lamps fixtures in commercial office buildings

Replacing High Thermal Mass with Low Thermal Mass (LTM) in Ceramic factories

Insulating the Un-insulated pipes, fittings and tanks in food industries

Insulating walls and roofs in 35000 new houses.

The main mitigation actions and NAMAs focusing on renewable energy and energy efficiency are provided in Annex C.

1.2.4 Intended Nationally Determined Contribution

The recently published Intended Nationally Determined Contribution proposes to reduce Jordan’s GHG emissions by a total of 14% by 2030. This includes an unconditional contribution of 1.5% compared to the BAU scenario and a conditional target, subject to the availability of international financial aid, of

24 Jordan TNC, 2014 25 A primary source of energy is one that occurs naturally - Fossil fuels (coal, oil and gas), biofuels, wind, waves, solar radiation and nuclear fuels are all primary sources of energy. The main primary energy projects in TNC are: Reduction of Loss in Electricity Transmission and Distribution (T&D), Improving Combustion Efficiency in Rehab Power Plant, Combined Cycle Gas Turbine in Risha Plant, Distribution Network of Natural Gas in Aqaba, Demand Side Management: introducing activities to reduce overall energy consumption. Primary energy mitigation activities are projects that attempt to be efficient in the process of converting primary energy to secondary energy (for example - turning coal to electricity). 26 Jordan’s Third National Communication on Climate Change submitted to the United Nations Framework Convention on Climate Change (UNFCCC) 27 Jordan’s Third National Communication on Climate Change submitted to the United Nations Framework Convention on Climate Change (UNFCCC)


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12.5%. The estimated cost of achieving the overall reduction is USD 5,700m of which GoJ has secured USD 542m, leaving a gap of USD 5,158 to meet its conditional target. At the national level Jordan is currently developing the “National Strategy and Action Plan for Transitioning to a Green Economy in Jordan 2016-2025”. At a sectoral level, the INDC proposes actions in the energy, transport, waste management, industries, water and agriculture, and food security sectors. Examples of EE and RE actions are given in Table 6.

Table 6 - Examples of sectoral actions identified in Jordan's INDC

Sector Renewable energy Energy Efficiency

Energy

Developing and utilizing the local conventional and renewable sources of energy (expanding the development of renewable energy projects) and encouraging investment in renewable energy

Requiring the implementation of green building codes

Encouraging the use of solar energy for water heating

Rationalizing energy consumption in all sectors and improving their efficiency and raising awareness about the long-term financial benefits of energy efficiency

Transport

Reducing all emissions from transport sector (i.e. CO2, CO, PMx, NOx expressed in tons per day);

Reducing the percentage of fuel consumption (in tons per day) through the implementation of the transport strategy

Increasing transport sector ride-ability through adopting and implementing policies related to fleet characteristics to enhance efficiency and reduce emissions thus yielding positive effect on energy consumptions and reducing CO2 and other greenhouse gases emissions;

Ensuring the inclusion of energy efficiency considerations when buying transport modals

Industries

Encouraging investment in solar and wind energy projects near industrial clusters

Providing alternative energy sources and motivating local industry to use alternative energy sources;

Implementing comprehensive programs for renewable energy and rationalizing energy through JREEEF

Water Sector Improving energy use efficiency in water utilities, and implementing a number of


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projects based on renewable energy sources

Developing the Ministry of Water and Irrigation’s (MWI) Energy Efficiency and Renewable Energy Policy for the Jordanian Water Sector

Introducing renewable energy as a source to supply water systems

The conditional contribution will be met by implementing tens of projects, some of them part of the 43 sectoral projects identified in the TNC. The conditional target will be met by implementing these projects and additionally a number of other projects recently identified.

1.2.5 Overview of key policies and actors implementing mitigation activities

The aims of these mitigation activities can broadly be characterised in one of three ways:

- Creating incentives for private and public interventions in RE and EE – whether economic incentives (tax relief, tariff subsidies) or regulatory incentives (standards, codes).

- Developing national scale public programmes for delivering RE/EE, particularly in the public, residential and commercial sectors.

- Developing the supporting capacity and supply chain for the RE and EE in Jordan.

Table 7 highlights the main policy and legislation relevant to the PMR target sectors as well as the main actors delivering these mitigation activities.

Table 7 – Policy and actors delivering Jordan’s GHG Mitigation Activities

Policy and legislation

Purpose and key actors

National climate change policy (NCCP) for 2013-2020

Coordinated by the National Climate Change Committee, under the Ministry of Environment’s Climate Change Directorate and Green Economy Unit, established the mitigation and adaption priority actions for Jordan, an implementation plan and the roles and responsibilities of key actors to deliver these actions. These have been re-enforced in in Jordan 2025-A National Vision and Strategy (launched June 2015).This draws on the National Agenda for Sustainable Development, 2006-2015.

JEF by-law 66 in 2009

A public financial institution, Jordan Environmental Protection Fund was created in 2009 for financing projects strengthening capacity of entities to comply with national environmental protection, under the MoEnv. Hitherto projects have focused on treatment of industrial wastewater, solid-waste management, energy conservation and renewable energy sources.

Renewable Energy and Energy Efficiency Law, 2012

Building on the Energy Master Plan, created a centralized tender for Large RE projects run by the ministry of Energy and Mineral Resources, and tariff incentives for smaller scale projects with bonuses for Jordanian origin. Tax exemptions for IPP of RE, and RE and EE equipment

Creation of a public financial institution, the Jordanian RE and EE fund (JREEEF) in 2012 under the MEMR, to fund and deliver large scale public RE and EE programmes (as per the NEEAP 2013), and support the capacity building of RE developers and EE service providers.

Energy Efficiency and Renewable Energy Policy for the Jordanian

The Ministry of Water and Irrigation’s Energy Efficiency and Renewable Energy Policy for the Jordanian Water Sector (2015) is aimed the optimization of energy use in the water sector serves the objective of financial restructuring through improving cost recovery, tapping alternative energy sources, and decreasing inefficiencies.


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Water Sector (2015)

National Energy Efficiency Action Plan, 2013

The NEEEAP is an ambitious document establishing measures which will enable Jordan to meet its GHG mitigation and energy resilience aims, along three key themes:

Creating the economic incentives for energy efficiency

Delivering large scale national programmes for GHG mitigation. Namely, residential solar water heater programme, light replacement in SMSEs, public and residential buildings, and water pump energy efficiency. . (For the water sector, MWI EE and RE Policy for the Jordanian Water Sector (2015))

Developing supporting capacity and supply chain for the RE and EE industry

There are a vast number of implementing actors, from Government Agencies (MoEnv, MEMR, GAM, MWI, MT, MoMA, MoT), PFIs (JEPF, JREEEF), private sector parties (JEPCO and distribution cos) and importantly, a large participation of the donor community, including Multilateral development Banks, (WB, EBRD), International organisations (UNDP), foreign aid organisations (AFD, USAID, JICA, Europe Aid, Canadian Government)

1.3 Institutional landscape

Climate change is in the process of being mainstreamed into the policies and strategies of many Jordanian ministries. This is particularly true of the Ministry of Energy and Mineral Resources (MEMR), Ministry of Water and Irrigation (MWI), Ministry of Transport (MoT), Ministry of Municipal Affairs (MoMA) and the Greater Amman Municipality (GAM). Figure 7 illustrates some of the key institutions relevant to the climate change agenda.

Figure 7 – Illustration of some of Jordan’s key institutions relevant to the Climate Change agenda

1.3.1 National Climate Change Committee

The National Climate Change Committee (NCCC) was established in 2001. Its main responsibilities are to:

Provide oversight of all climate change projects in Jordan.

Lead climate change adaptation and mitigation actions and ensure the integration of effort within national development strategies and plans.

Support the reporting activities under UNFCCC.

Supervise the development of legal regulatory and institutional arrangements.

Act as a national advisory body on climate change.

Provide oversight and evaluation of all climate change policy, programmes and projects.


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NCCC is chaired by the Minister of Environment and includes representatives from 10 line ministries, 3 public institutions, 4 research and academic organizations and 4 NGOs. 28 These include the Ministries of Energy and Mineral Resources, Water and Irrigation as well as the Greater Amman Authority. The Roadmap for implementation of the TNC calls to “expand and enhance the role and mandate of the National Climate Change Committee” 29, in order to strengthen its effectiveness.

The TNC further calls to “Activate the national policy of climate change through stakeholders’ coordination and mainstreaming of CC concepts in sectoral policies”, and to “integrate climate change issues in bilateral and multilateral international cooperation programmes in Jordan”

1.3.2 Ministry of Environment

The Ministry of Environment is the focal point for climate change issues. Since the Second National Communication (2009), Jordan has been making efforts to improve the policy framework for climate change. Climate change policy is now integrated in the Government Executive Plan (GEP) 2013-16 and the first national policy on climate change was adopted in 2013.

Implementation of the climate change policy is part of the Strategic Plan for the Ministry of Environment (2014-2016). One of the main goals of the plan is to develop the capacity of Ministry of Environment staff on climate change governance and the production of annual business plans so that the focus, funds and activities of the unit are defined, and their goals achieved.

A public financial institution, Jordan Environmental Fund (JEF) was created in 2009 for financing and supporting the implementation of projects that will strengthen the capacity of entities to comply with the national environmental law, under the MoEnv. On the recommendation of the NCCC the Ministry of Environment aimed to improve their environmental institutional framework. To do this, MoEnv have established the Climate Change Directorate and the Green Economy Unit.

1.3.2.1 Climate Change Directorate

The Climate Change Directorate (CCD) was created in August 2014. It is the National Focal Point for the UNFCCC and the Designated National Authority (DNA) for the purpose of facilitating Jordan’s participation in Clean Development Mechanism (CDM). The objective of this newly created Directorate is to follow up and strengthen the implementation of UNFCCC provisions as well as its Kyoto Protocol (KP) and related instruments that the conference of the parties (COP) may adopt and that Jordan ratifies. It will incorporate the high-level policy making / decision taking level and the executive level. It will also strengthen the internal capacity of MoEnv for climate change and new tasks under the National Climate Change Policy. Currently, climate change related projects undertaken are mainly donor funded. The Roadmap for implementation of the TNC calls to “Strengthen the capacity of the newly established Climate Change unit at MoEnv through proper organizational management, enhancing human resources and developing roles and mandate.” 30

Key Challenge

Insufficient capacity of the CC Directorate

So that it can effectively coordinate climate change policies, particularly among the institutions outlined below.

The Climate Change Directorate will be responsible for implementing the MRP. It will coordinate the PMR activities with the newly formed Green Economy Unit which will have overall responsibility for implementing Jordan’s Green Economy strategy.

1.3.2.2 Green Economy Unit

The Green Economy Unit: has recently been established by a decree from the Prime Minister’s Office. They have been undertaking various studies and actions to analyse how best Jordan can transition into a green economy. UNEP and GGGI are supporting the newly formed Unit. They are considering the formation of a multi ministerial “High Level Green Economy Steering Committee” to implement the

28 Jordan TNC, 2014 29 Jordan TNC, 2014 30 Jordan TNC, 2014


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Green Economy in Jordan.31 The terms of reference for this committee are currently being discussed, but it is likely that it will be a facilitating committee to improve the relevance and impact of green projects, and to help create an enabling environment for private investment and international capital funding. This will enable the coordination of individual green projects into portfolios and programmes. To support this, the Green Economy Unit is developing a “National Strategy and Action Plan for Transitioning to a Green Economy in Jordan: 2016-2025”, which they will be responsible for implementing when it is approved. It is anticipated that the Green Economy Unit will liaise with the Climate Change Directorate so that the activities within the PMR programme are incorporated into the overall activities of the Green Economy strategy.

1.3.3 Ministry of Energy and Mineral Resources

MEMR is responsible for defining policies, fixing tariffs and regulating all activities with an impact on energy. This includes the implementation of activities by the Renewable Energy & Energy Efficiency Directorate, to promote renewable energy and energy efficiency technologies. In particular MEMR was responsible for the Renewable Energy and Energy Efficiency Law 2012 (Annex D). In order to meet the target for renewable energy and to improve energy efficiency, MEMR has established32:

The Jordan Renewable Energy and Energy Efficiency Fund (JREEEF): JREEEF is one of the directorates of MEMR and is a key institution for financing and implementing the country’s main RE and EE programs33.

National Energy Research Centre (NERC): NERC was created for the purposes of research, development and training in the fields of new and renewable energy, and raising the efficiency of using energy in different economic sectors. This research centre is one of the specialised science and technological centres working under the umbrella of the Royal Scientific Society. It is involved in most of activities dealing with EE, RE, cogeneration, the shift from oil to gas, and related policies and financing tools”34

1.3.4 Ministry of Water and Irrigation

The water sector is managed by various public entities namely, Ministry of Water and Irrigation (MWI), Jordan Valley Authority (JVA), Water Authority of Jordan (WAJ), and Program Management Unit (PMU).

Jordan’s MWI Energy Policy for 2015 is aimed at overcoming the acute challenges it faces in this sector. The aims of the policy include promoting renewable energy use and energy efficiency measures for water pumping and treatment; this will have a large impact delivering GHG emission reductions in this sector. Specifically, there is a goal to increase the energy efficiency of the water supply and distribution systems and harness alternative energy sources to provide 15% of the power required to pump water throughout the Jordan.

1.3.5 Greater Amman Municipality (GAM)

Amman has a population of 2.8m, representing 43% of Jordan’s population. This is expected to reach 6.5m by 2025. In order to address the developmental needs of the city and to deal with growing demands on resources and city planning, the Greater Amman Municipality (GAM) has developed an Amman 2025 Master Plan between 2006 and 2008, and a Sustainable Action Plan in 2012. The Master Plan served as basis for development of a programmatic approach for CDM to cover cross-sectoral mitigation options in Amman and the City Wide Approach to PMR activities; it contains activities within energy, transport, water and agriculture (see Annex E).35

1.4 Key Policies, Regulation and Targets

The execution of the National Climate Change Policy relies on a framework of the laws, agendas and strategies developed by these Ministries and authorities. Figure 8 provides an overview of the relevant policies and strategies, developed by these institutions.

31 Information provided by Eng. Samir Al-Kilani- Director of Green Economy Unit. 32 Information provided by NERC Director and NERC Expert 33 http://www.memr.gov.jo/LinkClick.aspx?fileticket=j2Hm9pn0Osw%3D&tabid=111 34 http://www.encharter.org/fileadmin/user_upload/Publications/Jordan_EE_rr_2010_ENG.pdf 35 Organizing framework for scoping of PMR Activities for Jordan, Presentation 11 May 2012

http://www.memr.gov.jo/LinkClick.aspx?fileticket=j2Hm9pn0Osw%3D&tabid=111

http://www.encharter.org/fileadmin/user_upload/Publications/Jordan_EE_rr_2010_ENG.pdf


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Figure 8 - Jordan’s Climate Change supporting policy framework

The following sections provide further details on key policies, plans, and actors.

1.4.1 Renewable Energy Policy

The Energy Master Plan sets out a target of 9% renewable energy share in the total energy mix by 2020 (


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Figure 9): including 600 MW of wind energy projects, 300-600 MW of solar thermal projects and 30 to 50 MW of energy from waste. The recently launched Jordan 2025 - A National Vision and Strategy articulates a target of 11% of renewable energy share in the total energy mix in 2025. The energy strategy also seeks to increase reliance on local energy sources from the current level of about 4% to 25% by 2015, and up to 39% by 2020. This will also be complemented with the reduction of energy produced from oil from 58% currently to 40% in 2020.


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Figure 9 – Historic and targeted energy mix for Jordan36

Further, the Renewable Energy and Energy Efficiency Law was approved by the cabinet in 2012. More details are provided in Annex D: in summary it established the following:37

Centralized Tendering for Large Renewable Energy Projects.

Net-Metering incentives for small scale RE projects.

Tariff premium for RE projects of Jordanian Origin.

Income Tax exemptions for IPPs of RE.

Sales and custom tax exemptions for RE and EE equipment.

A public financial institution, the Jordanian RE and EE fund (JREEEF) in 2012.

These measures seek in part to soften the impact of the removal of energy subsidies on consumers by promoting self-production of electricity, and energy efficiency appliances. In addition, it seeks to stimulate the national RE supply chain, private sector involvement in the electricity generation through IPPs.

This legislation has been instrumental in promoting renewable energy in Jordan. Since the legislation was passed, more than 500MW of RE projects are being implemented or about to start. In addition, over 600 project applications with a total capacity of more than 22MW (JEPCO) were approved and executed in the residential and commercial sectors.

There are ongoing plans to deliver more RE projects, for example the Solar Water Heater Programme, and the Household PV Pilot Project North Jordan, which JREEEF is supporting. There is also a plan to develop solar powered water pumping in the Jordan Valley for small scale farms, but this is still in the planning phase.

In the water sector, MWI’s RE and EE Policy 2015 promotes the optimization of energy use. This policy provides a mandate for MWI to improve the energy performance of the water sector through the introduction of renewable energy technologies which will protect the environment and reduce the impact of energy price volatilities. It sets a target to increase the share of renewable energy use to 10% of the overall power usage by 2025. To achieve these targets, action plan priorities are being devised by setting three main milestones within this policy for the years 2017, 2021 and 2025.

36 Organizing framework for scoping of PMR Activities for Jordan, Presentation 11 May 2012 37 IEA, Policies and Measures, Renewable Energy Jordan, Renewable Energy & Energy Efficiency (Law No. 13),

http://www.iea.org/policiesandmeasures/


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1.4.2 Energy Efficiency Policy

In order to improve energy resilience, energy efficiency is a priority area for Jordan. Phasing-out of generous energy subsidies for fuel and electricity on most end-use products in 2008 was intended to create an incentive to increase efficient use of energy.

Jordan’s National Energy Efficiency Action Plan (NEEAP), endorsed in 2013, sets a national energy efficiency target of 20% by 2020. It targets five distinct sectors – residential, industrial, commercial, water pumping and street lighting. The historical averages, projections and reduction targets for 2020 of electricity consumption in these sectors are presented in Table 8. Additional targets exists to reduce energy consumption in public buildings by 10%. The water sector also has specific targets, in the MWI’s Energy Efficiency and Renewable Energy Policy for the Jordanian Water Sector (2015), specified below.

Table 8: Historical average sectorial electricity consumption, projections and reduction targets for 2020.

Baseline consumption GWh/(5 yr average)

Proportion of national consumption (5 yr average)

2020 reduction target

Consumption level in 2020

Proportion of national consumption 2020

Total 11,291 100% 20% 9,033 100%

Sector 1 Residential

4,447 39% 25% 3,335 30%

Sector 2 Industrial 3,013 27% 15% 2,561 23%

Sector 3 Commercial

1,875 17% 12% 1,650 15%

Sector 4 Water Pumping

1,668 15% 23% 1,284 11%

Sector 5 Street Lighting

288 3% 30% 202 2%

The NEEAP sets out a number of measures, broadly characterised in three areas:

Creating economic incentives for energy efficiency: The NEEAP sets out a mixture of taxes, standards and regulations in order to create the incentives necessary for consumers to increase energy efficiency, across all sectors. This includes product energy labelling the development of minimum standards/specifications for appliances, building codes, tax exemptions for energy efficient and renewable energy equipment.

Delivering large scale national programmes: In order to meet these ambitious targets, the government will plan, fund and deliver a number of national scale programmes, in the residential, commercial, public and street lighting sector. These constitute the priority NAMAs that Jordan has put forward for Energy Efficiency.

Developing the supply chain for the RE and EE industry: The NEEEAP also focuses on the need to provide capacity building in order to develop the energy services market and stimulating the national supply chain for RE and EE. This may include vocational courses, R&D, incubators and industrial pilots.

A number of large scale, public programmes are planned in order to deliver these targets. They will be managed by public implementing agencies, with some private sector partnerships (Annex F). Examples include:

National Solar Water Heater Programme,

National water pumping system efficiency upgrade and a

National light replacement programme.


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In the water sector, the MWI RE and EE Policy 2015 sets out targets for reducing energy consumption for water supply by 15%. To achieve this, as for renewable energy, an action plan is being developed which will setting milestones for the years 2017, 2021 and 2025.

Examples of large projects underway include the rehabilitation and replacement of Almuntazah pumping station to increase the effectiveness and efficiency of the power plant, and the replacement of pumping units at the Salt/Albkoreyah station. Annex F presents a list of all water projects linked to EE.

1.4.3 Key challenges

In the industrial sector the 2012 EE by-law for large consumers (consuming over 50 toe) requires large consumers to submit their energy audit reports after the end of the grace period in September 2015 (three years after passing the EE by-law). However, it is expected that this will be delayed since the by-law lacks proper enforcement by MEMR.38 Furthermore, the water strategy document recognises the need for better communication, coordination and distribution of responsibilities among the various entities involved in the water sector, in order to overcome challenges to efficiency measures in the water sector.39

Key Challenge

Lack of enforcement of EE regulation

So that Energy Efficiency targets can be successfully implemented

Weak coordination across key ministries and institutions to implement EE policy.

38 Information provided by Eng. Samer Zawydeh, private consultant, Assistant Director for international Membership Development for Middle East 39 Information provided by Malik Rawashdeh – Secretary General Adviser, Water Authority of Jordan


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2 Path to a Market Based Instrument in Jordan

This section summarises the:

Selection of a target area for PMR activities.

Previous experience with climate finance;

o The Climate Financing Challenge.

o Previous experience with MBIs: Clean Development Mechanism.

Key insights drawn from Chapters 1 and 2.

2.1 Selection of a target area for PMR activities

As part of Jordan’s PMR Organizing Framework40, five target mitigation areas were identified by the Jordanian Government as possible focal points for the development of PMR activities. They can be split according to a sectorial or cross sectoral approach, as show in Table 9.

Table 9 – Target areas proposed as part of Jordan’s PMR Organizing Framework Activities

Sectoral approach Cross sectoral approach

1. Renewable Energy for electricity generation

2. Energy Efficiency in buildings, streets, commercial and industrial sector

3. Water sector energy efficiency

4. Waste water treatment efficiency

The City wide approach was developed by GAM covering mitigation activities within the urban perimeter of Greater Amman – within energy, transport, water and agriculture. Amman is dealing with a number of issues including urban expansion, infrastructure and public transport development, landfill management, competing land uses, building efficiency and urban planning (further details in Annex E.

In order to determine which target mitigation area should be the focus of PMR activities, the PMR readiness of these sectors was assessed. “PMR ready” target areas indicated the areas which would be most ready to receive PMR interventions aimed at enhancing market based instruments and creating robust MRV Frameworks, in order to achieve mitigation and energy security goals.

40 Organizing framework for scoping of PMR Activities for Jordan, Presentation 11 May 2012











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PMR readiness includes considerations of the priority of that target area in terms of national goals, the readiness for development of MBIs for GHG mitigation or the current existence of MRV Frameworks. The readiness assessment criteria are presented in Annex E.

Table 10 presents the assessment of the target areas according to these criteria. Each of the categories is rated high or low depending on the positive or negative scoring of the indicators. More detail on the scoring is given in Annex E.

Table 10 – PMR readiness assessment of target areas41

Criteria Renew-able Energy

EE buildings, streets comm. and industrial

Water sector EE

Waste-water treatment efficiency

City-wide approach

1 Synergy with national development goals

High High High Medium Medium

a) Contribution to energy security

(limited)

b) Contribution to water security

ci) Cost-effective mitigation

(mixed)

cii) High mitigation potential

(limited)

2 Institutional and organisational readiness

High High High Medium Medium

a) Existence of institutional and policy frameworks

b) Low complexity of implementing mitigation activities

3 Level of Mitigation Activity High High High Low Low

a) Existence of mitigation activities and programmes, implemented activities

b) Existence of large scale implemented mitigation activities

4) Market Mechanism readiness High High High Low Low

a) Prior experience with market mechanisms

b) Responsiveness to economic incentives

41 Source: PMR Organising Framework presentation, and Ricardo-AEA’s assessment


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(mixed)

5) MRV readiness Medium Low Low Medium Med/low

a) Existence of data collection mechanisms

b) Existing MRV data

(mixed)

c) Established MRV Framework

Overall score High High High Medium Medium

Overall the Renewable Energy and Energy Efficiency in industrial, commercial, buildings (residential, commercial, public) street lighting, and the water sector are the most ready for PMR activities. Furthermore, Figure 10 shows that mitigation activities in the energy sector will impact other sectors and therefore enable a cross sectoral approach engaging a number of relevant ministries and organisations.

Figure 10 - Sectoral breakdown of energy emissions

2.2 Previous Experience with Climate Finance

2.2.1 The Climate Financing Challenge

As noted in Section 1.3.2, Jordan will require USD 5,158m to meet its conditional mitigation targets. While a significant proportion of this is likely to come from international sources of finance, one of the key sectoral actions for the energy sector is attracting private sector finance and reducing administrative obstacles in order to take advantage of JREEEF to support investment at an early stage.

According the WB’s Jordan Economic Monitor, 42 Jordan ranks 185th out of 189 economies in the “Getting Credit” indicator of the World Bank’s 2015 Doing Business report, due to its poor credit information system and its inadequate collateral and bankruptcy laws. The World Bank enterprise

42 Jordan Economic Monitor: Persisting forward despite challenges. The World Bank. Spring 2015.


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survey data reveal not only that access to finance in Jordan is limited, but also that the situation has worsened since 2006.

Domestic, Islamic, and foreign banks make up the banking system which is overseen by the Central Bank of Jordan (Annex G). The microfinance sector is made up from, commercial banks, governmental MFI's, and NGO's. The key microfinance providers in Jordan include credit providers structured as quasi-governmental institutions such as the Development and Employment Fund (DEF) and the Agricultural Credit Cooperation (ACC). Both provide direct retail financing to meet what they have identified as market gaps in underserved rural areas. 43 The largest microfinance providers in Jordan however are registered as non-profit companies. Further information on key actors and market share can be found in Annex G.

The recently published USAID study on Access to Finance: Survey for energy efficiency and renewable energy projects44 concludes that in general the banks are interested in financing RE and EE projects. There is a total of approximately JD 112m currently available for RE and EE financing (JD 76m available through the four commercial banks using the Central Bank of Jordan’s window for RE and EE and JD JD36m thorough the Agence Français de Development (AFD) facility). Key challenges in disbursing this money are a lack of credible market reference and a short credit history. In particular, this is a relatively new field and while some banks have already established designated credit lines others are still observing the market. A particular challenge for them is that they do not have sufficient knowledge to verify the project assumptions, technologies or risks. They need access to an independent, credible reference body for the accreditation of RE and EE projects. The report notes that “in many international cases, government funds and programs have acted as catalysts and trust builders for EE project development and financing. However, government funds like JREEEF and the Environment Fund are paralyzed with no active role in either developing the market or the financing schemes.” Nevertheless the EE and RE market is growing as a function of time and trust. As sources of competitive funding increase, awareness among clients and lenders is rising and real demand increasing.

In addition, a 2013 Vivid report45 highlights the following challenges to Climate Finance:

Reduced private sector lending: increasing squeeze on the lending capacity in the Jordanian banking system, largely as a result of the government’s financing requirements.

Patterns of lending that restrict access to credit.

Difficult fiscal climate restricts availability of public sector funds.

Lack of familiarity of financial community with particularities of RE and EE projects.

Lack of technical capacity of project developers.

2.2.2 Previous experience with MBIs: Clean Development Mechanism

Jordan’s previous experience with MBIs has been limited. For example, 15 project proposals received letters of approval from the Ministry of Environment as Designated National Authority (DNA). 46 Of these, only 4 CDM projects were registered with UNFCCC in Jordan. It seems that Jordan was much less successful compared to neighbours such as Egypt. It seems that the key reasons for this included:

Lack of awareness and capacity constraints: these have hindered the development of projects

and the engagement in potential opportunities by local institutions and public and private sector

organisations.

Direct government involvement was seen to hinder rather than facilitate development of CDM

projects.

Systems and procedures were lacking and transactions costs were high.

Lack of a clear system for CDM process at the DNA that should include data gathering system,

awareness mechanism for the public / investors, as well as, the follow up procedure.

There was not a national dedicated CDM project registry to facilitate tracking of CDM pipeline,

and guidance to potential developers.

43 http://www.bu.edu/bucflp/countries/jordan/ 44 Access to Finance: Survey for energy efficiency and renewable energy projects, USAID, 2015 45 Vivid Economics Report Study of mechanisms to incentivize the financial sector to scale up financing of green investment in Jordan, 2013 46 Indira Dahabi, Director of the Climate Change Directorate

http://www.bu.edu/bucflp/countries/jordan/


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Since there is currently a worldwide lack of demand to finance CDM projects, this represents a missed

opportunity. However a number of recommendations were made which would enable Jordan to position

itself more favourably for future MBIs. These include:

The need to be more proactive in promoting future MBIs and their benefits as well as developing

incentives for the private sector to take part in the MBI processes.

The capacities of local experts on MBIs need to be enhanced in order to improve the

involvement of local experts in project development in order to reduce transaction costs.

The capacities and the awareness of decision makers in the public sector need to be enhanced

in order to speed up the development of mitigation activities.

The capacity of the DNA needs to be strengthen to enable it to provide better responsiveness,

sustainability, efficiency and transparency as well as carrying out appropriate reform of the legal

and institutional framework.

There needs to be certainty concerning the commitment to the period for mitigation activities.

The certified emission reduction (CER) credits need to be sufficiently high to justify investments.

2.3 Key insights

The box below highlights the key insights drawn from this chapter:

Key Insights

Jordan’s GHG emissions are less than 0.1% of global GHG emissions

Nevertheless Jordan is committed to supporting international initiatives to reduce climate change and therefore take national action to mitigate its GHG emissions

It has set an ambitious target to reduce GHG emissions in its INDC

To achieve this target will require over $5bn

Given its current socioeconomic situation this cannot be achieved without attracting international funds and improving access to private sector financing.

Climate change actions need to be mainstreamed with Jordan’s national objectives including in particular sustainable development and energy security, and this requires capacity building (in particular) of two key institutions: the Climate Change Directorate, and the National Climate Change Committee.

Over 70% of the GHG emissions arise from the energy sector (including transport), so mitigation activities in this sector are likely to produce most reductions of GHG emissions.

Jordan is already planning and implementing a diverse range of mitigation activities across several sectors: there needs to be increased coordination and financing to ensure success.

Jordan’s Energy sector has already witnessed major transformations. However, continued concerted action to improve the financial viability of sector utilities, particularly energy and water, is important, and renewable energy and energy efficiency interventions will play an important role. This makes RE and EE good pilot areas for PMR, especially since they:

o Are cross sectoral.

o Will allow engagement with several ministries and organisations.

o Will enable capacity building in the finance sector.

While there is interest in funding RE and EE projects in all sectors, there is a lack of experience of the key actors in identifying sound projects to be financed

Government funds can be used as catalyst and to build trust between the actors but they are currently paralysed.

Previous experience with MBIs is limited, but following the experience of the CDM has provided recommendations which provide learning lessons for the development of market readiness for future MBIs. In particular, the need to developing a clear and robust systems for developing these projects, underpinned by verified data.


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3 Assessment of Technical and Institutional Market Readiness for an MRV Framework

This section presents the basics of an MRV Framework, and assesses the institutional and technical readiness of core institutions in Jordan with regards to implementing such a system. This system will be key to support strengthen Jordan’s capacity to track, plan and deliver mitigation activities, enable access to results based financing, and create readiness for a possible future crediting mechanism, at the project, programme or sectorial level.

In each of the following sub sections, the key challenges to the development of a robust MRV Framework are identified:

Introduction to MRV

Data, MRV Registry/Tracking Tool:

o MoEnv: Jordan Environmental Information System.

o MEMR Energy Information System.

o MWI National Water Information System.

o Greater Amman Municipality – Environmental Studies and Planning.

o Department of Statistics – Environment Statistics Division.

o Key challenges.

Summary of key institutional and technical challenges towards developing an MBI.

3.1 Introduction to MRV systems

This section provides a short introduction to the principles and practice of MRV systems.

MRV is a tool to support informed decision-making, and has three components:

M: Measurement / Monitoring

R: Reporting

V: Verification / Validation.

An MRV system can help to establish baselines to inform policy makers where action should be focused, and assesses changes in order to determine whether this action has been effective. Figure 11 shows how an MRV system integrates into the policy development cycle.











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Figure 11 - Integration of MRV into the policy development cycle

An MRV system allows policy makers to learn from experience by:

Identifying and replicating success;

Improving or stopping less effective activities.

Jordan develops good policies but lacks a culture of evaluating, learning and improving these policies47. The development of a reliable and transparent MRV system to support Jordan’s delivery of climate change goals will be the first step toward institutional learning in this regard, on a national scale.

The level of “rigour” required in an MRV process depends on the type of decision that the MRV system informs48. Some MRV systems only need to provide information to judge the “direction of travel”, whereas others could inform emission trading systems where accuracy and comparability are essential characteristics.

Measurement: The highest level of accuracy is provided by project- or installation-level data, while statistics and estimates provide a decreasing level of accuracy. Annual data collection also facilitates greater accuracy, whilst larger intervals between data collection reduces accuracy.

Reporting: All reporting must be transparent. The level of detail that is needed in the reporting mainly depends on the reporting obligation. The frequency of reporting needs to be clearly defined.

Verification: Can mean a review by an accredited independent third-party, or at lower levels of rigour, verification can be performed by a separate entity with relevant expertise, or within the same entity performing measurement and reporting.

In order to be cost-effective, an MRV system should be designed for an appropriate level of rigour, rather than being over engineered. Existing institutional structures and information should be used as far as possible.

An appropriately designed MRV Framework can build trust between parties in a multilateral process and enhance the potential for greater collective ambition by increasing transparency, facilitating communication and transfer of best practices.49

47 Sireen Hikmat, PPP Unit, Ministry of Finance 48 LDC Concerns related to MRV in the Climate Regime, Wartmann, Dodwell and Nafo https://ldcclimate.files.wordpress.com/2014/03/updated-ldc-papers_mrv.pdf 49 LDC Concerns related to MRV in the Climate Regime, Wartmann, Dodwell and Nafo https://ldcclimate.files.wordpress.com/2014/03/updated-ldc-papers_mrv.pdf

https://ldcclimate.files.wordpress.com/2014/03/updated-ldc-papers_mrv.pdf

https://ldcclimate.files.wordpress.com/2014/03/updated-ldc-papers_mrv.pdf


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3.2 Data, MRV Registry/Tracking Tool

At the moment MoEnv does not have a regulatory requirement for GHG emissions monitoring or regulation50. The TNC (2014) notes that Jordan lacks a national system to guarantee and facilitate the production, exchange and analysis of such data. It cautions that any GHG emissions system will take a lot of time and effort to be implemented.

In addition, the TNC highlights that there is a “complex” and “uncertain” landscape of mitigation actions being developed and implemented within Jordan. There is no sector-level source for MRV of GHG emissions. The various features of CDM, NAMAs, LEDs, PMRs, INDCs and other mitigation tools make it difficult for a holistic planning perspective in climate change mitigation.

The TNC emphasises that improved data access and quality, as well as GHG inventories are required for identifying not only the most appropriate mitigation measures but also for determining appropriate national mitigation strategies and developing low carbon development policies.

In order to address this, the TNC recommended the creation of “a central hub in the Climate Change Directorate of MoEnv for collecting, processing, archiving and reporting of GHG inventories.”

Moreover, the modalities for accessing and exchanging data are mostly based on informal arrangements. There are very few formal reporting obligations or methodologies implemented by the key stakeholders who generate the data. The process of developing the MRP revealed that existing Information Systems, for example in MEMR, MWI, GAM and the Department of Statistics (DOS), could play a role in data generation and collection. However, at the moment there is no formal system for data specification and exchange with MoEnv.

As the sectoral interventions, which deliver climate benefits are not managed by the Ministry of Environment, the need to explicitly involve key agencies and institutions (such as NEPCO) is crucial. This proposal seeks to strengthen the linkages between the Ministries through their information management systems. This would include, for example, capacity building for key ministries, such as the Ministry of Energy and Mineral Resources (MEMR) to strengthen its Energy Information System and data collection from all relevant energy sector actors. The Ministry of Environment will support this process by providing protocols, technical assistance and overall support for stronger sectorial and GHG MRV. This would enhance the opportunity for accounting of the GHG mitigation benefits emerging from recent sectoral transformation and pave the way for future actions.

3.2.1 MoEnv: Jordan Environmental Information System

The Jordan Environmental Information System (JEIS) is under development, with the aim of becoming a national hub for all environmental data including climate change data, GHG emissions, mitigation, vulnerability and adaptation data. It should be:

Available to policy makers, practitioners, civil society and general public;

Linked to and informed by National Information Centre and other relevant entities;

On-line platform with clear sustainability and updating plans.

However, JEIS is still at a very early stage of development. Although a unit has been formally created within the MoEnv to have oversight of JEIS, and there has been some investment in hardware and software, as well as human resources, further resources and technical capacity building are required.

3.2.1.1 Environmental Monitoring and Assessment Directorate

The Monitoring and State of the Environment and Indicators Division, within the EMA Directorate, monitors environmental activity of large polluting industries (chlorine and cement) and power generators for compliance purposes. It is particularly concerned with impacts on water and air quality as well as flue gases, ozone, SOx, NOx, and particulate matter.

The Directorate has the technical equipment and knowledge required for these environmental monitoring activities as well as familiarity with procedures for collecting, monitoring, and reporting of this data.

50 Jordan TNC, 2014


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In collaboration with the Climate Change Directorate, the EMA Directorate could provide CCD support in the required training and capacity building for the development of a data collection system for GHG emissions, following the detailed guidelines of the IPCC.

3.2.2 MEMR Energy Information System

In the Energy Sector, MEMR is establishing a database system which will contain relevant data and information51 in order to support national energy planning. This includes renewable energy, energy consumption and energy efficiency indicators from all sectors.52

The responsible unit within MEMR is the Statistical Information Division. 53 At the moment, there is no legislation underpinning data collection. Instead data is collected through telephone requests, letters and email correspondence. Data sources include the monthly and yearly data collected from companies, which is used in developing energy balance and annual reports. Energy balance is converted to emissions data using IEA conversion factors. The second source of data is from surveys relating to energy consumption in all sectors, including households, industry, agriculture and transport. Quality assurance checks on the data are carried out within the Division.

MEMR are seeking to improve this methodology by developing information systems, linking the data reporting units in order to facilitate data flow, and enable communications with external Information Systems. The definition phase of the project to develop the information system, has been completed; it has been successfully tendered and consultants to carry out the project have been selected. They are now entering the implementation phase.

NERC is also in the process of establishing a data base on renewable energy and energy efficiency indicators. This database can be accessed through a portal dedicated for publishing related data and information on renewable energy and energy efficiency in Jordan.

3.2.3 MWI National Water Information System

The development of a National Water Information System (NWIS) is planned by MWI. Implementation of this will be supported by EC funding.54 The objective is to develop the NWIS into a communication and data exchange platform, building on existing information systems in a number of water sector institutions. Development will involve: re-engineering MWIs existing Water Information systems and upgrading the information systems of other stakeholders where necessary; validating existing data and preparing a knowledge management system. The detailed functional design of the NWIS will enable the collection of activity data on energy consumption in the water sector as well as waste water treatment data.

3.2.4 Greater Amman Municipality – Environmental Studies and Planning

The Environmental Studies and Planning Division in GAM collects data on activities with environmental impacts at the sectoral level, e.g. waste, for Amman. The purpose is to support Amman’s waste management system and help execute the waste management strategy55.

The type of waste data collected includes activity data (tonnage by time period of waste transferred to landfills), operation and logistics of the landfill and waste treatment plants. GAM is undergoing capacity building with the support of external consultants, to develop KPIs. In 2014 they began to collect information on the amount of biogas (methane) captured at one particular landfill site, but otherwise do not collect GHG emission information.

3.2.5 Department of Statistics – Environment Statistics Division

The Environment Statistics Division of the Department of Statistics (DOS), was established in 1995. Environmental data published by DOS includes data sets on the quantity of municipal solid waste from economic enterprises, industry and households as well as water supply for households and municipal

51 Information provided by Mr. Mahmoud Ales -Deputy, Secretary General at MEMR (at the time of interview).

al ResourcesEng.Abdessalam Rashaideh, IT Director, Ministry of Energy and Miner 52 53 IEA Energy Statistics and Indicators Training Cairo 20-23 October, 2014 Jordan Energy Statistics Compilation Methods Abdel-motaleb Al-nugrush Head of Statistical & Information Division Ministry of Energy & Mineral Resources 54 Information provided by Jordan’s Royal Scientific Society/Green Tech. 55 Interview with GAM’s Suha Shishani of the Environmental Studies and Planning


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purposes. Data is gathered by annual surveys, from data held by environmentally concerned institutions in Jordan56 and through field work based on interviews. Data sourced from Ministries, Governmental Departments, Public and Private Institutions are collected by official correspondences: DOS cautions that inter-ministerial information systems are still poorly coordinated.

There is a common concern that different information systems lack common spatial data references, methodologies and definitions. There are often issues with discrepancies in data sourced from different information systems. A common e-government platform would greatly facilitate the exchange of information between the relevant institutions and organizations and ensure that the data are used at a strategic level for policy development and enforcement.

DOS is very supportive of the ongoing work to develop the JEIS within MoEnv and DOS. The Environment Division intends to improve integration of environmental, economic and social aspects in line with UNSD and UNEP Green Economy initiatives. Finally, the Division wants to conduct household surveys covering waste electrical and electronic equipment, energy and water.

3.2.6 Key challenges

In order to develop a robust MRV for reporting GHG data, it will be necessary to specify data

requirements, and develop systems and procedures for exchange of information between existing

information systems and key public institutions involved in implementing mitigation activities in

Jordan. The former includes information systems identified at the municipal, sectorial and national

level, as well as JEIS. The latter includes for example the relevant units within the MWI, JREEEF and

JEF. In developing the MRV Framework it may be useful to consider the development of national

emission factors for major GHG sources like energy, waste and industrial processes as recommended

in the TNC. The following box present some of the challenges that will need to be addressed

56 Department of Statistics document provided by Sona Abu Zahra, Environmental Statistics Division

Key Challenges

Lack of a comprehensive national environmental information system.

JEIS requires provision of key technical resources including the provision and development of an

appropriate data management system, and human resources, to perform data collection and

storage role. In addition the staff of the CCD require capacity building so that they can perform QA

and QC of the data collected for JEIS. The TNC calls for “Conducting an intensive training

programme on the development of a GHG emissions system, including detailed use of IPCC

guidelines”.

Lack of a single entity at the newly-established Climate Change Directorate in the Ministry of

Environment to act as a hub to:

Collect, process and report GHG emissions, exploring the possibility of creating a

National GHG Inventory System. This is required for identifying not only the most appropriate

mitigation measures but also for determining appropriate national mitigation strategies and also

for developing low carbon development policies

Maintain a registry for key mitigation, vulnerability and adaptation data. There is a

“complex” and “uncertain” landscape of mitigation actions being developed in Jordan. A registry

of such activity would enable transparency, and further coordination. In addition, including

financial data on activities would demonstrate the cost effectiveness of mitigation and

adaptation activities in Jordan.

TNC calls for the development of a map of all available financial resources in climate

change. This will enable the CC directorate to explore opportunities for resource mobilization,

and support the channelling of available domestic financial resources into areas of direct

connection with climate change.

Lack of Technical capacity.


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We note that the lack of robust information makes it very hard to assess which MBI would in future be most appropriate for Jordan, whether it be an emissions trading system, or a crediting based instrument.

3.3 Summary of key institutional and technical challenges

A summary of the institutional and technical challenges to developing an MRV Framework in Jordan are provided below.

Capacity building is required for data providers in order to ensure they have the necessary support

to perform their role in the MRV Framework.

Lack of legal enforcement for sharing of data

The TNC calls for the development of a legal structure that “adheres” activity data producers to

submit information to the MoEnv.

Key Challenges

Lack of strength of the NCCC

So that NCCC can establish robust climate change policies which are mainstreamed with other national

development, social and economic needs and will be implemented by the appropriate line ministries.

Insufficient capacity of the CC Directorate,

So that it can effectively coordinate climate change policies, particularly in the institutions outlined in

section 1.3.2.1

Lack of enforcement of EE regulation

So that Energy Efficiency targets can be successfully implemented

Weak coordination across key ministries and institutions to implement EE policy.

Lack of a comprehensive national environmental information system which includes GHG

emissions and mitigation activities



Collect, process and report GHG emissions, exploring the possibility of creating a

National GHG Inventory System.

Maintain a registry for key mitigation, vulnerability and adaptation data.

Map all available financial resources in climate change.

Lack of Technical capacity.

Capacity building is required for data providers in order to ensure they have the necessary support to

perform their role in the MRV Framework.

Lack of legal enforcement for sharing of data.

The TNC calls for the development of a legal structure that “adheres” activity data producers to submit

information to the MoEnv.


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4 Assessment of Private Sector Financial and Technical Market Readiness to Develop a Pipeline of Mitigation activities

This chapter summarises the:

Status of the RE and EE markets;

General financial context;

RE and EE financing including key challenges;

Role of the public sector;

Stakeholder landscape.

It provides a summary of the key challenges for generating a pipeline of mitigation activities, in particular renewable energy and energy efficiency projects.

4.1 Status of the RE and EE markets

Jordan has a growing market of energy efficiency and renewable energy projects. Regarding demand factors, regulatory incentives to stimulate demand for these markets are in place in Jordan, and tend to focus on large scale projects. On the supply side, the number of potential project developers is growing, with an increasing number of SMEs. Project developers face a number of financial, technical, and legal challenges to delivering such projects. Regarding financing of such projects, financiers similarly face a number of technical and legal challenges to providing financing.

This section provides an overview of the demand and supply factors of the RE/EE markets in Jordan, and highlights some of these key challenges. The financial challenges are the focused upon because of their alignment to PMR priorities.

4.1.1 Demand factors

Regulatory incentives are the main factor generating demand for EE and RE projects in Jordan. Regarding incentives for energy efficiency projects, for many years energy consumers in Jordan have benefited from low and heavily subsidised fuels and energy prices. Since 2008 Jordan has been phasing out energy subsidies on most end-use products (except liquefied petroleum gas used by households), in order to create incentives to increase efficient use of energy. However, the government has had to maintain measures to limit energy cost impacts on households and businesses competitiveness. These measures include cash back to low income citizens, maintenance of industry subsidies, tax incentives on local energy efficiency equipment.

Regarding other kinds of incentives, section 1.4.2 provides an overview of existing EE policy in Jordan, particularly that envisaged in the NEEAP 2013. Apart from creating economic incentives for energy











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efficiency the government is stimulating the project pipeline by planning and delivering large scale national programmes. Measures also exist to develop the supply chain for the RE and EE industry, in addition to awareness raising campaigns and development of building codes.

In addition, the 2012 Renewable Energy and Energy Efficiency Law (REEEL) legalised private sector participation in the electricity generation by permitting and providing tariff incentives for the submission of direct project proposals by IPPs, and providing net-metering tariffs to encourage self-generation particularly among households. It provided for tax exemptions for independent power producers (IPPs) of RE, and RE and EE equipment. Ambitious targets for installed RE capacity exist, but there is much work still to be done. The energy master plan calls for up to 1,200 MW of wind, 600 MW of solar and 50 MW of waste-to-energy to be brought online by 2020. To meet this target a further gigawatt of capacity is still required.57

In summary, many of these regulatory incentives are relatively new, and in the case of the NEEEAP, are in the process of being implemented. In addition, they target principally largescale projects. There is a gap in demand generating from small to medium sized projects. The government could implement policy to target these areas, but is reluctant to over expose smaller consumers to rising energy prices. In the RE sector, more economically attractive policies such as feed-in-tariffs or similar subsidies could be considered. In EE, financial and technical support schemes for smaller consumers are envisaged, but have yet to be fully implemented. However, addressing such challenges is not the focus of PMR activities for Jordan.

4.1.2 Supply factors

4.1.2.1 General Financial Context

Jordan has an unsustainably high public debt (81% of GDP, and an unsustainably high government budget deficit (8.3% of GDP in 2014)58. Jordan 2025 has set out a strategy for reducing the deficit. The Jordan Economic Monitor59 suggests that the government has already had some initial success in reducing the deficit, achieved by (mostly) cyclical improvement in revenue collection and contained growth in spending.

Jordan is highly dependent upon and attracts significant amounts of foreign direct investment and aid funding. $25bn of foreign direct investment was received in 2012 accounting for more than 80% of GDP.60 Jordan has become a favourite destination for foreign investors, attracting 3% of the total FDI coming into the MENA region, while Jordan’s GDP is 0.8% of the combined MENA GDP. International aid plays a significant role in guaranteeing government loans. This has strengthened the central bank’s ability to develop a financially resilient banking system61. It also highlights the need to develop robust MRV Frameworks since this is often a condition of aid/international funding. However, the recent global economic crisis, increased uncertainty in the region and the government’s financing requirements 62 are reinforcing the bank’s cautious lending behaviour. 63

Amongst the private sector, access to finance in Jordan is limited, and the situation has worsened since 2006.64 As highlighted previously, Jordan ranks very low in terms of “getting credit” indicators, due to its poor credit information system and its inadequate collateral and bankruptcy laws. Access to finance is particularly poor among small and medium sized enterprises (SMEs) compared to larger firms. The relatively few large companies attract most lending while many micro, small and medium sized companies find it difficult to attract funds. 65 49% of large enterprises were able to attract the credit they required, compared to 35% for medium enterprises, 26% for small enterprises and 15% for micro enterprises. Given the number of small enterprises and the need to grow them, microfinance providers have an important role to play.

57 OECD, Jordan Assessment Report, Optimising The Incentives Framework For Renewable Power Infrastructure, ISMSED Issues Paper, 2014 58 Jordan 2025 59 Jordan Economic Monitor: Persisting forward despite challenges. The World Bank. Spring 2015. 60 According to Jordan 2025 61 According to Jordan 2025 62 Vivid Economics Report Study of mechanisms to incentivize the financial sector to scale up financing of green investment in Jordan, 2013 63 According to Jordan 2025 64 Jordan Economic Monitor: Persisting forward despite challenges. The World Bank. Spring 2015. 65 Jordan 2025


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4.1.2.2 RE and EE financing

Attracting private sector finance to deliver mitigation measures in the energy sector is a priority highlighted in Jordan’s INDC. Jordan will require USD 5,158 million to meet its conditional mitigation targets.

In general Jordan’s banks are interested in financing RE and EE projects, however the amount of funding available is very low. 66 Some banks have designed credit lines for financing RE and EE projects while others are observing the market. Approximately JD 112 million is currently available for RE and EE financing. This is split into JD 76m through the four commercial banks using the Central Bank of Jordan’s window for RE and EE and JD36m through the Agence Francais de Development (AFD) facility. It is likely, therefore, that new sources of finance will need to be attracted in order to achieve the INDC conditional target.

Banks prefer financing RE projects, particularly those which are of a larger size and linked to their existing client base. EE and smaller sized projects are less preferred. This is particularly concerning given the nascent stage of the RE and EE markets in Jordan. Microfinance institutions could play a vital role in financing EE and RE in market segments that are not of interest to commercial banks. Microfinance organizations are well-suited to the task and have a strong desire to enter the EE and RE market. 67

4.1.2.3 Project developers

The market for Energy Service Providers is small but growing. There are ten Energy Service Providers (ESPs), according to the Survey of Energy Services Industry in Jordan68 . These companies are increasingly involved in renewable energy projects as well as energy efficiency projects. The majority of ESPs in Jordan at the current time are small and medium-sized companies. They are typically engineering firms involved in conducting energy audits and the installation and maintenance of energy efficiency equipment. ESPs are expected to play a critical role in implementing and financing RE and EE measures in Jordan. This may be by:

Developing design, and arranging finance for energy efficiency projects;

Installing and maintaining energy efficient equipment;

Measuring, reporting, and verifying energy savings; and

Assuming the risk that there will be a positive cash differential arising from energy savings resulting from the implementation of projects.

Very few ESPs provide financing or carry out customer qualification. Due to the high degree of uncertainty and the risks involved in energy efficiency projects, most of these companies prefer a Fee for Service type of contract. However, knowing that the market will not take off unless there is some type of performance guarantee, a surprisingly large number of ESPs have shown interest in performance contracts. In addition, no GHG verifiers exists in Jordan. This has contributed to the high transaction costs, and low number of CDM projects developed, as discussed earlier. There is the potential for ESPs to develop the capacity to provide verification services.

Key challenges to the ESPs market are the lack of suitable financing mechanisms and ineffective government policies. The lack of familiarity and capacity to use performance contracting are further obstacles to the development of this industry in Jordan. 69 A number of measures are currently underway to support the development of the ESP market. NEEAP 2013 contains measures to support the market, via funding, institutional set-up and governance, best practice and capacity building, as well as implementation and financing. JREEEF is receiving support from the USAID ESCB programme in order to develop the ESP market in line with the requirements of the NEEAP. Activities have included raising the awareness raising of ESPs possible role in EPC contracting. In addition, a private sector led accreditation system for energy service providers is currently being developed by the USAID ESCB project. This will bring together the three energy associations in Jordan: EDAMA, Jordan Green Building

66 Access to Finance: Survey for energy efficiency and renewable energy projects, USAID, 2015 67 Access to Finance: Survey for energy efficiency and renewable energy projects, USAID, 2015 68 Survey of Energy Services industry in Jordan, USAID 2015) 69 Survey of Energy Services industry in Jordan, USAID 2015)


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Council and Renewable Energy Establishment Society (REES) to form a not-for-profit company that will administer an accreditation system.

4.1.2.4 Key challenges to RE and EE financing70

The relative infancy of the small-and-medium scale RE and EE industry in Jordan means that the risks in financing this sector, especially to private sector companies, are still considered by the banks to be high. While some banks have already established designated credit lines others are still observing the market. A particular challenge for them is that they do not have sufficient knowledge to verify the project assumptions, technologies or risks. Furthermore, due to the novelty of the market, the absence of a credible reference body and independent advisory sources, banks rely on collateral as the most important tool for risk mitigation. Accordingly, RE and EE loans are often treated as any other loan even if the bank has a designated of channel of funds available for RE and EE projects. This is a particular problem for RE and EE projects, which are usually project financed. In the case of EE projects, ESPs are typically small companies without sufficient collateral to support their lending requests. ESPs are perceived by the banks to be consultants rather than project implementers or credible providers of turnkey solutions due to their lack of track record. Most ESPs are new, so that it is difficult to verify past project performance. Financial statements submitted with loan requests are often weak (e.g. double accounting, differences in audited vs. actual). . JREEEF is looking to support PDs through technical assistance for preparing bankable proposals.

Although the AFD fund has JD36m, this has not been fully disbursed. One of the reasons for this was the short period for implementing the technical assistance programme: most of the start-up period was spent in promoting the initiative and starting the communication process. As a consequence, insufficient technical support was provided to the PDs.

70 Access to Finance: Survey for energy efficiency and renewable energy projects, USAID, 2015


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Key Challenges

Lack of familiarity of financial community with particularities of RE and EE projects. Lack of technical capacity of financiers, and availability of technical verifiers. Financiers need access to an independent, credible reference body for the accreditation of RE and EE projects, to minimise risks. Lack of appropriate financial products. Lack of technical capacity of project developers.

4.2 The role of the public sector

As well as creating the right regulatory incentives, the public sector could play a pivotal role in catalysing investment in RE and EE projects and building trust between the relevant actors. The public sector is very active in implementing RE and EE projects in Jordan; pioneering this market through PPPs.

The work of the public financing institutions, such as JREEEF and JEF, although small scale, could play a crucial role in promoting early stage investment, especially for PPP projects, and projects with co-financing. They could create a pipeline of RE and EE projects. This would increase the familiarity of the financial community with these kinds of projects, and therefore decrease the perceived risk. Equally, providing a credible market reference for the RE and EE service providers would enable them to build a reputation in order to approach banks for financing future projects. These funds could provide collateral to such projects, acting as guarantors for RE and EE projects until alternative financial products are established. Banks prefer lending to projects underwritten by the government. As an example, JREEEF is providing grants and guarantees as part of the Solar Water Heater programme. This is a key feature of many of their programmes.

The international donor community also plays a critical role supporting the government’s aims. Not only do they provide financing solutions (grants, soft loans, guarantee facilities, and loans), but often capacity building and technical assistance is also provided. An example of this is KfW’s support (subsidies and loans) for modernization efforts in the water sector; enhancing the credibility of ESPs among both lenders and end consumers. However, donors have expressed their concerns that current activities lack clarity and are fragmented, which impedes the coordination of activities, and consequently the scale of results based financing. The donor community is supportive71 of a public registry of projects which would allow transparency and coordination of ongoing activities, as well as the assessment of their cost effectiveness. In addition, these donors were particularly supportive of developing strong GHG MRV Frameworks so that the effectiveness of their results based climate financing could be demonstrated. Local banks are usually the conduits for donor financing, increasing familiarity with RE/EE financing, and creating the demand for robust MRV Frameworks. One of EBRD financing channels is an indirect lending facility operated by local partners. As the Bank's policy states that it must avoid competing with local banks, EBRD plans to operate a facility window (similar to AFD) through selected local banks. The Central Bank of Jordan (CBJ) is now looking to target funds for SMEs with MoPIC, and support from donors such as the European Union, the Development and Employment Fund of the Jordanian Ministry of Planning and International Cooperation, and more recently, from commercial banks. Given the relatively large number of very small companies, Microfinance is also an area of focus for government and donors.

4.3 Stakeholder Landscape

The section below provides additional context on the key public and private sector stakeholders involved in the RE and EE markets in Jordan. Importantly, it also reviews the role of JREEEF and JEF.

71 Roundtable with MBDs held during the June mission to Jordan, included attendance of EBRD, AFD, USAID, and UNDP.


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4.3.1 Public sector involvement

4.3.1.1 MOPIC and Ministry of Finance

The Ministry of Planning and International Cooperation’s key roles are identified below. 72

The International Cooperation Department oversees all international funding either formally or informally. Funding may be via bilateral agreements between the donor and MOPIC, directly to other line ministries (with the agreement of MoPIC) or via other specific mechanisms (e.g. GEF SGP). The Department coordinates and facilitates technical and financial support for developmental projects and programs in cooperation with the granting countries and parties, major aid and funding donors (e.g. EC, Asia, USA, WB), and scientific partnerships.

The Projects Department monitors the Donor projects and receives organizations’ and ministries’ financing requests.

MoPIC is responsible for maintaining the Jordan Aid Information System (JAIMS) which is a database of ongoing aid funded and assisted (grants, soft loans and technical assistance) projects and programmes in Jordan.

Jordan Aid Information Management System (JAIMS)

The Jordan Aid Information Management System (JAIMS), which can be accessed through the Ministry of Planning and International Cooperation's website www.mop.gov.jo, was developed to map all ongoing projects and programs funded through foreign assistance (grants, soft loans, technical assistance, and twining programs) provided by donors and international financing institutions (IFIs) in various sectors. The system was developed to be user-friendly so that it can improve the coordination of donor funded projects and the transparency of foreign aid extended to Jordan. It provides report on foreign assistance committed to Jordan by donor, project, sector and location (i.e., governorates where the project is being implemented). At the moment the information contained in JAIMs includes:

Project title, Donor, Project start date and end date

Type of Assistance (soft loans, grants, technical assistance, twining, and budget support)

Sectors (health, education, energy, water and wastewater, infrastructure, etc.)

Project objective and main components

Donor contribution in original currency and in USD equivalence

Government contribution

Agreement signing date

Project status (ongoing, closed, in closing phase, and in preparation phase) Since JAIMS is accessible via the MOPIC website the information is freely available to other organisations. MOPIC is currently reviewing JAMS and is anticipating that it will receive financial support to upgrade it. It will be possible for other ministries to specify additional information that would be useful to include in JAIMS.

The Development Plans and Programs Department prepares, revises, updates and formulates the long-term socio-economic vision which blends the National Agenda with local development. This department tracks the achievements and disbursement of funds to programmes and projects affiliated to the enhanced productivity programme. It also maintains and ensures the coordination between internal and external funding agencies, as well as relevant executing agencies.

The Ministry of Finance develops and implements the national fiscal policy. It cooperates and coordinates with related Ministries and Departments to train and qualify their personnel on financial and accounting skills (http://www.mof.gov.jo/). MOF will approve public investment provided to funding mechanisms projects and programmes within the EE and RE sector, probably through some form of intermediation with MEMR, or MoEnv. MoF and the Central Bank coordinate closely with MoPIC to

72 http://www.mop.gov.jo/

http://www.mop.gov.jo/

http://www.mof.gov.jo/

http://www.mop.gov.jo/


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oversee, sign agreements and monitor all international financial flows into the country. Such flows are approved by the Cabinet. MoF’s PPP unit highlighted an ambiguity and a potential contradiction in the PPP Law of 2014 and the REEE Law (2012). This contradiction leaves it unclear whether direct proposals for the development of renewable energy projects (and other projects for generating electrical power and connecting to the grid) put forward by independent power producers fall under the remit and should meet the specifications of the REEE Law, or the PPP Law. This could become an obstacle to delivering RE projects in Jordan73.

4.3.1.2 Jordan Renewable Energy and Energy Efficiency Fund

The Jordan Renewable Energy and Energy Efficiency Fund (JREEEF) was created within the MEMR by the 2012 RE and EE law to support projects and initiatives that aim to reduce energy consumption and/or utilize renewable energy sources.74 The by-law for financial management was finally approved by the legislative commission in June 2015. JREEEF was seeded with JD 25 million in grant funding.

The fund will be financed by national and international institutions.75 Funders to date have been the revenues from CDM (10%), government support through the rural electrification project (fills Al Reef), 5% of revenues from sales of energy production from renewable energy projects (governmental projects), EU funding (under discussion) and co-funding from Canadian Government (under discussion).

The fund focuses on five pilot sectors (residential, SMEs, tourism, health and public buildings). The approach is to work with market developers (ESCOs, energy service providers, national programmes, NGOs and community organisations (CBO), universities and institutions) and market supporters (banks, MFIs, IFIs, aid programmes, donors, loan guarantee facilities) in order to achieve its aim. JREEEF will partner with these actors, seeking funding from the market supporters, in order to finance or co-finance programmes implemented by the market developers. The latter will be done through JREEEF’s financial support “windows”: revolving credit, grants and guarantees. Both national and foreign project developers will be eligible for funding.

JREEEF also has a technical support window, aimed at providing technical assistance to key financing beneficiaries e.g. funding energy audits and the creation of M&V systems, preparing bankable project proposals and developing awareness raising campaigns for RE and EE.

Finally, JREEEF also provides equity financing (risk capital) for projects, companies or individual entrepreneurs to accelerate the development or deployment of innovative technologies.

The following projects have been approved, planned and under implementation for 2015:

Approved (partners) Planning stage (partners)

Household PV Pilot Project North Jordan (Mercy Corps, EDCO, CBOs)

Household Solar Water Heater Project (Jordan River Foundation)

Distribution of LED bulbs in refugee camps (MoPIC)

Energy Efficient Lighting Projects delivered by electric utilities (IDECO, EDCO, JEPCO)

Scaling up household SWH and PV with donor co-financing (Canadian DFATD, EU)

Interest Subsidy project for SMSEs (Jordan Loan Guarantee Facility)

Technical Assistance grants

Support for Innovation and R&D

73 based on an interview with Sireen Hikmat, MoF’s PPP Unit 74 http://www.invest-export.irisnet.be/documents/16349/1140680/2014+-Jordan+-+Renewable+energy+prospects.pdf/eb6cb1ff-a6d9-4d7c-804f-13b68877d86d 75 IEA, Policies and Measures, Renewable Energy Jordan, Renewable Energy & Energy Efficiency (Law No. 13), http://www.iea.org/policiesandmeasures/

Key Challenge

Ambiguity in laws and regulations of different ministries. For instance, the PPP law and the REEE laws for direct proposals by private sector companies for renewable energy projects has been identified as a case example

http://www.invest-export.irisnet.be/documents/16349/1140680/2014+-Jordan+-+Renewable+energy+prospects.pdf/eb6cb1ff-a6d9-4d7c-804f-13b68877d86d

http://www.invest-export.irisnet.be/documents/16349/1140680/2014+-Jordan+-+Renewable+energy+prospects.pdf/eb6cb1ff-a6d9-4d7c-804f-13b68877d86d

http://www.iea.org/policiesandmeasures/


April 2016 Page 37

The fund has a legal personality. The Board of Directors of the Fund oversees the activities of the Fund; its members are the Energy Minister (chair), Secretary-General of the Ministry of Environment, the Ministers of MoPIC and MOF, as well as three representatives from the private sector. It is steered by a council formed by the MEMR, MoEnv and the national distribution companies.

JREEEF is receiving capacity building aid from donors, in particular USAID ECSB and AFD. A donor coordination committee was formed, with the participation by USAID, AFD, EU, DFATD, EBRD, KfW, and the World Bank.

ESCB is supporting JREEEF 76 to make it fully operational. This has included: developing a JREEEF strategy and business plan; identifying JREEF’s business principles and philosophy; identifying interim staffing requirements; coordinating the efforts of other donors; briefing the JREEEF Management Committee and the Minister of MEMR on JREEEF plans; and supporting the design and implementation of RE and EE pilot projects. JREEEF and MEMR require a mix of technical, management and financial competencies and expertise in order to manage the fund. More importantly, there is a need for a transparent and effective governance structure that makes JREEEF the best choice for green financing.

77. JREEEF is receiving substantial capacity building support, in particular through ECSB, and a similar technical assistance and market research consultancy services by AFD. Support is also needed to establish appropriate project evaluation, selection, management and monitoring systems as well as reporting and third party verification of project impact.

4.3.1.3 Jordan Environmental Fund

The Jordan Environmental Protection Fund (JEF) was established within the Ministry of the Environment, under by-law 66 in 2009. It aims to provide financial support, mainly through grants, for projects that will strengthen the capacity of organisations to comply with the national environmental law on environmental protection and preservation. JEF aims to drive technological and process improvements across selected sectors and will complement existing environmental expenditure in Jordan.78

The fund was launched with $5.6 million in 2011. It has been operational for 3 years and has so far distributed $1.4m. In its first year it focused on renewable energy projects; in the second on municipal works, organic agriculture, water and irrigation; and in the current year it will focus on waste management.

JEF is managed by a Board of Directors headed by the Minister of Environment or his authorized representative. The board is composed of representatives from 5 public and 5 private sector organisation, selected by the Prime Minister, following the recommendation of the Minister for the Environment. It has the potential to play a similar role to JREEEF in financing and delivering mitigation activities, and has expressed the desire to do so. Although JEF has delivered RE projects the past, funding mitigation activities will require a widening of their current role, to include a specific focus on mitigation activity, and the development of project selection criteria which include an assessment of projects’ impact on GHG emissions. In addition, JEF currently lacks adequate human, technical and financial capability to perform its current role79, let alone an expanded role.

76 Email exchange with Heffner Grayson 09/08/2015, key coordinator of technical assistance to JREEEF by USAID and ECB 77 Jordan TNC, 2014 78 http://ar.jordannetwork.net/en/content/financing-energy-efficiencywater-efficiencyclean-production-projects-jordan 79 Interview with Ms. Hana Al Shihabi, General Director of JEF, September 2015`

Key Challenges

Lack of technical and institutional capacity of JREEEF

Lack of robust MRV Frameworks to access international donor funding

For example, JREEEF is interested in becoming accredited to the Green Climate Fund.

Continued need for fundraising

So that JREEEF can maintaining capitalisation and ensure sustainability.

http://ar.jordannetwork.net/en/content/financing-energy-efficiencywater-efficiencyclean-production-projects-jordan


April 2016 Page 38

4.3.1.4 Other relevant public sector organisations:

Other relevant Public sector organisations include:

Jordan Investment Board, which works with the private sector to attract investment and facilitate

registration and licensing procedures for projects.

The Jordan Upgrading and Modernisation Programme (JUMP) is an independent government body,

currently under the scope of Jordan Enterprise (see: www.jedco.gov.jo), which funds energy efficiency

activities including energy efficiency audits and implementation of energy efficiency measures.

Higher Council for Science and Technology (HCST) which provides small grants for carrying out energy audits and implementing energy efficiency measures through the Industrial Scientific Research Fund and National Fund for Support Enterprises.

4.3.2 International Donor landscape

There are numerous multilateral banks and aid organisations which are active in Jordan, and have a focus on RE and EE sectors. Key funders include USAID, Europe Aid, JICA (Japan International Cooperation Agency), AFD, Canadian Government, Abu Dhabi Fund, Gulf Co-operation Council, World Bank (IFC, IBRD), European Investment Bank and the European Bank for Reconstruction and Development. They are vital to providing financing and technical assistance to enable the development of RE and EE projects.

GIZ and KfW are setting up and capitalizing a public-sector energy efficiency fund. KfW is providing €30 million to support efficiency measures on 700 public buildings.

UNDP’s Global Environment Facility Small Grants Programme includes funding for RE and EE projects, in the GEF Focal Areas; Biodiversity, Climate Change Mitigation and Adaptation, Land Degradation and Sustainable Forest Management, International Waters and Chemicals. This is implemented by funding local community projects, CBOs and NGOs. So far this fund has provided co-financing exceeding $12.5 million.

The AFD’s Green Lending Programme, discussed above.

USAID Energy Sector Capacity Building in Jordan, includes institutional capacity building for JREEEF, to enable implementation of EE projects. Key capacity building activities within the USAID programme include80:

EE, RE and DSM project development and evaluation.

Financial management and fund administration.

4.3.3 Private sector

4.3.3.1 National Financing Institutions

Jordan’s banking system is made up from domestic, Islamic, and foreign banks. It is overseen by the Central Bank of Jordan. Annex G provides more detail of Jordan’s banking and microfinance system. Key actors include:

Central Bank of Jordan which provides money to commercial banks for RE projects at a rediscounted rate at the time of giving the funds to commercial banks minus of 2% (fixed rate) for a period of 10 years. In return, commercial banks provide collateral to the central bank in form of checks or bonds.

80 http://pdf.usaid.gov/pdf_docs/pa00jvnj.pdf

Key Challenges

Limited institutional capacity and resources

Lack of Fundraising

Support is required to maintaining capitalisation to ensure sustainability in order to carry out their

intended activities.

http://www.jedco.gov.jo/

http://pdf.usaid.gov/pdf_docs/pa00jvnj.pdf


April 2016 Page 39

With this arrangement, the central bank in theory assumes no risk for money provided to the commercial banks.

Jordan Loan Guarantee Fund (JLGF) which was established to provide partial loan guarantees and technical assistance to enable creditworthy but underserved SMSEs to obtain bank financing. The fund collaborates with seven major Jordanian banks: Arab Bank, Cairo Amman Bank, Housing Bank, Capital Bank, Al ahli Bank, Al Etihad Bank, and Jordan Kuwait Bank. It has guaranteed over 103 loans, of which 2 loans are for financing PV installations in schools. Although there is no allocation for specific sectors or industries, the Fund's management showed interest in customizing a guarantee product for renewable energy and energy efficiency loans.

Tanmeyah – National Association for Microfinance. As of June 2012, the Jordanian microfinance market consisted an outstanding portfolio of over JD150 million, with an average annual growth rate in outreach of 28 percent between 2006 and 2010.81

Banking Associations including the Banking Association of Jordan and the Jordanian Banks Association.

4.3.3.2 Project developers

Below are key institutions and associations representing RE and EE project developers.

Jordan Chamber of Industry (JCI) represents the general interest of the business community, providing information and advice to members, promoting economic development, providing market information and economic statistics, encouraging foreign investment, and facilitating international trade.

Jordan River Foundation (JRF) an NGO which partners with civil societies, research institutions, JREEEF, municipalities, and community based organizations to implement their projects. In particular is implementing a project to support the installation of solar panels to domestic houses.

4.3.3.3 Intermediaries/Consultants

Verifiers, auditors, others involved with capacity building and accreditation

Jordan Standards and Metrology Organization (JSMO) which among other activities is responsible for issuing, approval, reviewing, amendment and monitoring the implementation of standards and technical regulations with regard to all goods

National Energy Research Center (NERC) which improves methods, incentives and advisory services in order to improve the efficient use of energy, in order to decrease the national energy cost and to protect the environment

The Royal Scientific Society (RSS) which supports and strengthens large governmental research projects and commercial incubators for both small and medium enterprises. Industrial firms contract RSS to assess potential impacts on the environment

4.3.3.4 RE and EE associations

EDAMA Association which acts as Jordan’s focal point, supporting the energy-water-environment sector to increase its capabilities, capacity, and positive economic and environmental impacts.

Jordan Renewable Energy Society which is developing a community of researchers, engineers, economists, entrepreneurs, educators and decision makers who are raising awareness of the potential and opportunities of the renewable energy.

Jordan Green Building Council which is a member-based organization to promoting the adoption of Green Building Practices in all phases of the building process leading towards making Green Buildings a widespread reality in Jordan.

4.4 Key Challenges

The table below summarise the key challenges to developing a pipeline of mitigation activities:

81 IBRD, “Project appraisal document on a proposed loan in the amount of us$70 million to the Hashemite kingdom of Jordan for the micro, small, and medium enterprise development for inclusive growth project”, Report No: 72284-JO, February 6, 2013

https://en.wikipedia.org/wiki/Green_Building

https://en.wikipedia.org/wiki/Jordan


April 2016 Page 40

Key Challenges

Lack of familiarity of financial community with particularities of RE and EE projects.

Lack of technical capacity of financiers, and availability of technical verifiers.

Financiers need access to an independent, credible reference body for the accreditation of RE and EE projects, to minimise risks.

Lack of appropriate financial products.

Lack of technical capacity of project developers.

Ambiguity in the PPP law and the REEE laws regarding which law is applicable to the implementation

of projects for renewable energy projects, put forward directly by IPPs

Lack of technical and institutional capacity of JREEEF and JEF

Lack of robust MRV Frameworks to access international donor funding

Continued need for fundraising for JREEEF and JEF


April 2016 Page 41

5 Addressing Institutional and Technical Challenges: Developing a Multi-tiered MRV Framework

This chapter explains how the multi-tiered MRV Framework will address the key challenges identified above, and create readiness for a possible future project based or sectoral crediting mechanism.

The chapter starts with a review of the main challenges Jordan faces to prepare itself for MBIs, and then moves on to provide a detailed description of the MRV Frameworks Jordan needs, and how these could be configured.

5.1 Key Challenges

In Chapter 2 we identified key institutional and technical challenges faced during Jordan’s experience with CDM. These are extremely relevant in the context of creating MBI readiness.

In chapter 3, we identified a number of key institutional and technical challenges for Jordan which need to be overcome to prepare Jordan to participate in future MBI: in our view, all of these challenges can be overcome. The following box provides a summary of key challenges to Jordan’s institutional and technical readiness for an MBI:










Key Challenges

Lack of a clear system for carrying out the CDM process at the DNA including the lack of: a robust

data gathering system, awareness raising for the public investors, as well as, the follow up procedure.

No national dedicated CDM project registry to facilitate tracking of CDM pipeline, and guidance to

potential developers

Limited capacities and the awareness of decision makers in the public sector which can speed up

CDM project development;

The CDM development in Jordan requires strengthening of the capacity of the DNA towards better

responsiveness, sustainability, efficiency and transparency; to carry out the appropriate reform of the

legal and institutional framework of CDM.

Key Challenges

Lack of strength of the NCCC, and mainstreaming of CC concepts in sectorial policies.

Lack of mandate and Insufficient capacity of the CC Directorate, to enable it to effectively coordinate

climate change policies.


April 2016 Page 42

The PMR package of activities will seek to address these institutional and technical challenges to Market Readiness by developing a multi-tiered MRV Framework, at the sectoral and project levels. It will do so providing capacity building, technical assistance, human and IT resources to targets the key challenges identified above.

The multi-tiered MRV Framework will create market readiness by:

1. Building capacity to access results based climate finance. Developing and institutionalizing a robust system for the quantification of project emissions and baselines, and GHG savings. This will particularly support the delivery of public sector mitigation activities. As these are often developed in partnership with the private sector, this will have a catalysing effect in creating a pipeline for private sector involvement in RBF. It will help to develop private sector verifiers, and build the capacity of project developers.

2. Strengthening the capacity to plan and deliver mitigation activities and programmes, by creating a system for the collection and communication of robust data which will enable:

Tracking of mitigation activities, including GHG reductions achieved and the cost effectiveness of reductions; vital for policy planning.

Planning of climate change policy, and international support for these climate change projects and programmes.

Institutional strengthening and integration by increasing inter-governmental cooperation and integration, enabling the mainstreaming climate change issues.

Reporting and dissemination of key policy conclusions resulting from analysis of mitigation activity and emission data, e.g. priority mitigation sectors, and cost effective GHG reductions.

5.2 A multi-tiered MRV Framework

Figure 12 represents the intended multi-tiered MRV Framework, containing both a MRV Framework of project projects, and an MRV Framework of emissions in pilot sectors.

Both tiers of the MRV Frameworks are required in order to plan, track and deliver mitigation activities, and wider climate change policy through target setting, and identification of priority mitigation sectors.

Lack of enforcement EE regulation in order to meet targets

Weak coordination across key ministries and institutions to implement EE policy

Lack of a comprehensive national environmental information which includes GHG emissions and




Maintain a registry for key mitigation, vulnerability and adaptation data,

Collect, process and report GHG emissions

Map of all available financial resources in climate change.

Lack of monitoring and data gathering systems, and technical capacity for supporting data providers

Lack of legal enforcement for the collection of data from different ministries and other organizations


April 2016 Page 43

Figure 12. How the multi-tiered MRV Framework supports Climate Change policy making

The purpose, operation, activities and timeline for delivering the multi-tiered MRV Framework are elaborated below.

5.3 MRV Framework of Mitigation activities

5.3.1 Objectives of a MRV Framework of Mitigation activities

Developing an MRV Framework of mitigation activities will fulfil the primary objective of creating readiness for a crediting MBI while minimizing regrets, as these activities are vital for building capacity to access results based finance, and strengthen capacity to plan and deliver mitigation activities and programmes. The sections below summarise how this MRV Framework will achieve this.

1. Enabling access to results based climate finance.

The MRV Framework will build the institutional and private sector capacity to access results based climate finance. The key institutional capacity resides in implementing agencies, and it needs to be underpinned by reliable information systems. The private sector capacity lies in project developers and verifiers, and requires technical training on MRV topics.

CCD will play a role in identifying appropriate, well considered and implementable methodologies, and harmonizing approaches for:

Quantification of project emissions and baselines. Methodologies for quantifying emissions and calculating project baselines based on activity or energy consumption data ex-ante the implementation of the project.

GHG savings methodologies or protocols. Methodologies for estimating GHG savings, against counterfactual baselines.

Project emissions and baseline data gathering. The compilation of project baseline data can provide a bottom-up estimate of programme or sectorial baselines, to inform a future crediting mechanism at sectorial or policy level.

Project specific GHG savings methodologies. Again, these methodologies can be replicated and scaled for use in future crediting mechanisms.

2. Strengthening the capacity to track, plan and deliver mitigation activities and programmes.

The transparent system will be developed which will enable:

Tracking. It is essential to track all the specified indicators and metrics in the MRV Frameworks.

Mitigation contribution. It will create a track record of Jordan’s contributions to the climate change mitigation. This will allow greater transparency over what is now considered a “complex” and “uncertain” landscape of mitigation actions being developed and

MRV of Mitigation Activities

MRV of Emissions in pilot sectors

Tracking mitigation projects:

• Cost effectiveness

• GHG savings achieved

• Contributing to project level baselines

Tracking emissions in key mitigation sectors:

• Verification of GHG savings achieved

• Sectorial emission baselines, projections, target setting

• Identification of priority mitigation sectors

CC Policy: planned mitigation and national CC targets

• Climate Change Policy Planning: identification of

priority mitigation activities for ministries and

implementation agencies, and future national CC

targets

&


April 2016 Page 44

implemented. In addition, international support is usually conditional on some form of MRV to robustly monitor results, and this will allow compliance with these conditions.

Support received. In the context of an additional target of 12.5% emission reductions by 2030 relative to BAU82 conditional on receipt of international aid, this will allow the tracking of support (financial, technical, capacity building) received for these mitigation activities.

Planning. Clear plans will lay the foundations for successful MRV implementation.

Climate change policy planning. The MRV Framework will also provide a track record of the cost effectiveness of mitigation activities. From a policy planning perspective, this can support prioritisation of future mitigation activities. This should be complemented by an MRV Framework to track GHG emissions, in order to set future targets and to identify priority sectors for mitigation activities.

International support planning. This information will be made accessible, through an open access project registry. From an international support perspective, this will allow an understanding of the effectiveness of the support received, and enable planning of future support.

National policy planning. The usefulness of this data is not restricted to Climate Change policy planning. As indicated, mitigation priority activities (RE and EE) also address energy resilience and sustainable development goals in Jordan. Therefore, this data can complement and support energy related policy planning in other ministries (e.g. MEMR, MWI, MOT, GAM, etc.).

Institutional strengthening and integration. Cooperation between institutions will facilitate efficient working practices and the effective sharing of data.

Cooperation will build trust, and facilitate data and knowledge exchange. The MRV Framework will create channels of communication and data sharing between previously unconnected governmental units, implementing agencies, and the CCD.

Synergies. Importantly, it will also allow for synergies with ongoing activities in different government departments. For example, the MWI and MEMR are in the process of developing information systems, which can collect the data needed to inform baseline and GHG savings calculations, and can facilitate the data collection activities of JEIS.

5.3.2 Components of a MRV Framework of Mitigation activities

The key components of the proposed MRV Framework are described in Figure 13 and the text below. They have been designed to make maximum use of the current institutions in Jordan to allow cost-effective implementation, to overcome known barriers (for example, problems with accessing data which can be addressed using legal instruments) and where necessary, to preserve the confidentiality of data.

82 Jordan INDC 2015


April 2016 Page 45

Figure 13 - The vision for a MRV Framework for mitigation activities (Indicative)

Climate Change Directorate

Jordan GHG Mitigation MRV Framework

Monitoring

Feedback from outputs to help determine inputs

Ministry of Environment (facilitation/oversight)

JEISData compilation

Data storage, online

platform maintenance

GHG Savings

Project support

– financial,

technical,

capacity

building

Project Costs

MOT

projects

JREEEF

(MEMR)

JEF

(MoEnv)

MWI

projects

Implementing

agencies

GAM

projects

Fuel

switching

Rooftop

PV

Waste

project

Landfill

methane

Pumping

stations

Bus rapid

transport

Others…

• Capacity

building to

access results

based climate

finance

• Creating MBI

readiness

• Tracking

national

contribution,

international

support and

sectoral

contribution

Planning:

• Climate

Change policy

• Sectoral

mitigation

policies

• International

support

• Institutional

integration

Ou

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me

s

Communication

GH

G &

finan

cia

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g

(Mo

nito

ring, V

erific

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Information

Systems

Monitoring &

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Directorate

Department

of statistics

Energy

Information

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Water

Information

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Others…

GAM

Environment

studies

Sh

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ata

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Mitigation Activities MRV technical committee (monitoring)

National CC Committee (Monitoring, support

and dissemination to all sector agencies)

CC Directorate

QA/QC Team

Data checking –

interpretation –

calculation

Jordan

Mitigation

Project

Registry

Periodic 3rd party

auditing of data

Indicator and

baseline definition

Rep

ortin

g (a

nd V

erific

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CCD approved

information filtered,

published by JEIS

MEMR


April 2016 Page 46

CCD will be the owner of the project registry of mitigation activities. MoEnv will have ultimate oversight of the system, and facilitate its development, in consultation with other ministries and relevant institutions.

5.3.2.1 Reporting

The system will establish three levels of upward reporting (listed from bottom-up):

Project level reporting. This includes the creation of a project development document (PDD), a

study of project level baseline emissions, and emission reductions achieved. Reported

information will consist of verified PDDs, emission reductions (ERs) achieved, and the cost of

these projects.

Implementation agency level reporting. An aggregation of the ERs achieved by the projects,

and the cost of these projects, determining cost per tCO2e abated.

CCD will report to

o The NCCC, and other national communications. This will include an aggregation of

the ERs achieved by each implementation agency, and the cost of so doing.

o Appropriate interested parties by the creation of an open access, web-based project

registry which will be maintained by JEIS.

Reporting will occur at periodic intervals (e.g. annually), so establishing a regular systematic reporting system and procedures and calculation methodologies.

CCD will specify the reporting, (and monitoring and verification) requirements which implementing agencies, and project developers will have to provide. CCD will also specify methodologies and format reporting, in order to harmonise approaches across implementing agencies. To avoid duplication, these may be drawn from existing methodologies and processes being implemented in Jordan but may include the development of Jordan specific emission factors. The objective is to develop the JEIS team so it can perform, under the supervision of CCD, the data compilation and storage role.

Examples of implementing agencies are given above. They may include GHG mitigation activities implemented by JREEEF, JEF, MWI, GAM and MoT. It is envisaged that they will cooperate with the Information Systems, in for example, MEMR, MWI, MoEnv and GAM. Due to limited resources, stakeholders developing projects in key PMR sectors will be prioritised. The intention is that these reporting units will contain representatives from most (if not all) ministerial sectors involved in mitigation activities. Their cooperation may include:

Collection and sharing of activity data, e.g. energy consumption, for project baseline calculation.

Supporting data sharing, management, and storage using existing IT infrastructure.

An agreement will specify the role and responsibility of the reporting units. Such an agreement may be reached by a MOU or, if necessary, backed by a legal mandate under an environmental by-law (although the latter is more time consuming). It is envisaged that the implementing agencies will have primary responsibility as reporting units, however, the Information Systems may provide solutions for data sharing with JEIS.

5.3.2.2 Verifying

CCD will specify the reporting and verification requirements which implementing agencies will have to fulfil. This may include verification by independent third party verifiers. At each level of reporting, the following verification requirements will be created:

Project developers, in developing their project development documents will have to identify

independent third party verifiers to confirm the ERs if appropriate.

Implementing agencies will have the responsibility of verifying the project level information,

performing basic quality assurance and quality control (QA and QC) checks and ensuring that

3rd party verifiers have been involved if appropriate.

CCD will perform a similar role to that of the implementing agencies, ensuring (by collecting

evidence) that the project level information has been collected to the specified standards, and

data has been converted to the correct units, in accordance with the agreed methodologies. In

addition, there will be periodic third party auditing of the aggregated project information

provided published by the CCD.


April 2016 Page 47

5.3.2.3 Monitoring

Monitoring of these activities will occur through the verification of periodically reported information, at these levels:

Implementation agencies will be responsible for monitoring the project level activities.

CCD will be responsible for monitoring the activity of implementation agencies.

To ensure continuous improvement of the system, data outputs will be evaluated by the CCD team, and improvements to inputs requested from the reporting units if necessary. This will also allow the specification of new indicators, and the refinement of project, or larger scale emission baselines.

A Technical Committee will provide the focal point for monitoring, institutional cooperation and learning. The committee will be composed of technical representatives of the implementing agencies, representative of the information systems, CCD and JEIS. This group will:

Initially provide a platform for training on the reporting guidelines, and subsequently a Partnership for knowledge sharing among reporting units.

Facilitate the data specification and development of processes for systematic data collection in order to increase efficiency.

Provide an overview of the registry development process, to ensure continuous improvements.

Adjustment to the specification of data inputs given feedback from the outputs of the process.

CCD will be responsible for sharing key data insights with the National Climate Change Committee, in order to collaboratively inform climate change policy making, which in effect will be performing an additional monitoring role. NCCC, as a multi-ministerial private and NGO committee, will support in the nationwide dissemination of the key policies, insights and other outcomes.

5.3.3 Activities during 1st PMR Implementation Phase

The activities described above are the ideal end-goal of the MRV Framework of project activities.

However, it is recognised that it may take longer than the PMR implementation time-frame for this to be completed. While these activities are not necessarily data intensive to begin with, capacity building is required at every level in order to initiate the reporting, and subsequently the verification and monitoring activities. The creation of institutional frameworks and procedures, and capacity building of reporting units (project, and agencies) will be the focus of the 1st PMR implementation phase.

Therefore, in the first implementation phase of the PMR activities, the following will be carried out:

1. Design of the institutional framework for the MRV Framework, which will include:

Mapping of the implementation agencies

Identification of the data required and its format.

Preliminary scoping and design of system.

Stakeholder consultation to identify key roles and responsibilities (as per the stakeholders mentioned above).

Establishment of the Technical Commitee, including the agreement of MOUs between the partcipants and CCD.

2. Setting up MRV Frameworks: institutional framework, which will include:

Technical assistance to CCD in preparing the Terms of reference for the development of an

MRV Framework. These will include the :

o Definition of the reporting, monitoring and verification requirements for all levels.

o Development of a harmonised approach to emission baseline calculation, and GHG

savings reporting based on a review of existing methodologies, in Jordan and globally,

for reporting on GHG savings of projects.

o Development of approporiate guidelines


April 2016 Page 48

Defining the responsibility and roles of the implementation agencies, regarding reporting,

monitoring and verification. This will be agreed by the technical committee following

stakeholder consultation.

Developing MOUs to establish the roles and responsibilities of institutions within the MRV

Framework as defined (backed by legal mandates, if necessary).

3. Implementation of the MRV Framework: capacity building, technical assistance, which will include:

Technical assistance and capacity building of CCD to provide support in performing the

monitoring, development of GHG emission assessment methodologies, QA/QC and

verification requirements.

Technical assistance and capacity building of the implementation agencies, delivered through

the technical committee, and to include;

o Develop templates for reporting, and support to meet these requirements, including

for project level reporting

Development of the project level PDDs of 2-3 pilot projects. These will be RE and EE projects

in pilot sectors.

Pilot activities: selected implementation agencies and projects

Activities in the 1st implementation phase will focus on a subset of GHG mitigation activities – specifically, renewable energy and energy efficiency projects – since these are defined as the priority activities addressing Jordan’s dual aim of mitigation and energy security, and PMR resources are limited.

PMR activities will fund the capacity building of the cross sectoral implementation agencies, which will begin the process of institutional learning about project level MRV. Due to limited resources, stakeholders developing projects in key PMR sectors will be prioritised.

The remaining implementation agencies will be encouraged to develop similar studies for projects in their domain. In addition, where possible dissemination of guidance via the NCCC will seek to support learning of stakeholders not directly involved in the 1st pilot phase.

Due to limited resources, PMR funds will only be allocated to develop in-depth PDDs for 2-3 pilot projects. Projects will be chosen as pilots to receive technical assistance in order to develop baselines and GHG reduction studies. The projects will be chosen at implementation stage, but could include:

JREEEF’s Solar Water Heater Project, or RE and EE projects in the Industrial SMEs

MWI’s Improving Energy Efficiency in water pumping stations

4. Delivery of key outputs

Development of mitigation progress reports, reported to the NCCC and other ministries, to support CC policy making.

Dissemination of key guidance materials developed for the technical committee through the NCCC.

Development of IT solutions for a project registry (which may be simplistic to begin with) and a

suitable web platform for publication of this information, using the JEIS team and IT resources.

At this stage, the role that the Information Systems can play in data sharing will be defined.

Objectives of the 1st PMR implementation (pilot) phase and beyond

The focus of this 1st implementation phase is to develop the following activities:

Creation of institutional frameworks and procedures,

Building institutional capacity (CCD and implementation agencies), and

Project level capacity with pilot projects.


April 2016 Page 49


It is expected that at least 2-3 pilot projects will be reporting into the project registry at the end of the 1st implementation phase.

In (possible) subsequent implementation phases, once the institutional framework has been well established, the journey of institutional learning and capacity building will continue, with the same stakeholders. In addition, more implementation agencies and projects will be selected, providing the opportunity for wider learning.

In addition, an increase in reporting activity and therefore data will require more sophisticated IT solutions.

5.4 MRV Framework of Sectoral Emissions in pilot sectors

5.4.1 Objectives of an MRV Framework of Sectoral Emissions

The main objective of the MRV Framework of sectoral emissions in key mitigation sectors is to support the planning and delivery of mitigation activities. In addition, the development of an MRV Framework of sectoral emissions will continue to build Jordan’s capacity to attract climate finance, and also provide a number of important co-benefits. The objectives and benefits of an MRV Framework for emissions are explained below.

1. Enabling access to results based climate finance.

Developing institutional familiarity with key methodologies, in particular the quantification of sectoral baseline emissions. CCD and the information system units, in particular, will benefit from developing familiarity with emission and sectorial baseline quantification methodologies. For CCD, this will be fundamental for its possible role as a quality assurer of project based GHG emissions and savings, under the MRV Framework of mitigation activities.

This will create readiness for a future MBI, while minimizing regrets, by the development of sectoral emissions and baselines, to inform a future crediting mechanism at sectoral level.

2. Strengthening capacity to track, plan and deliver mitigation activities and programmes, including:

Identifying priority mitigation activities for the future.

Target setting and monitoring. Tracking of emissions in priority sectors will allow monitoring against existing sectoral mitigation targets. It will also build an understanding of aggregated effects of policies and economics at a sectoral level, so allowing future mitigation target setting.

Verification. Tracking and cross checking the effectiveness of mitigation activities.

Institutional integration: Cooperation between different institutions will build trust, allow for data and knowledge exchange, and identify synergies in data collection, management and storage systems.

National policy planning; As before, monitoring emissions can effectively support energy related policy making well beyond the climate change sphere. More importantly, it allow Jordan to have a better understanding of the GHG implications of economic and development policies.

5.4.2 Components of an MRV Framework of Sectoral Emissions

Figure 14 summarises the vision for an MRV Framework for emissions which the PMR activities will aim to implement. The key components are described in the text below the diagram.


April 2016 Page 50

Figure 14 - The vision for a MRV Framework for emissions in pilot sectors (indicative)

Many of the activities here will complement those for the MRV Framework of mitigation activities. CCD will be the owner of the MRV Framework for sectoral emissions. MoEnv will have ultimate oversight of the system, and facilitate its creation.

5.4.2.1 Reporting

This MRV Framework will establish two levels of upward reporting (listed from bottom-up):

Information system level reporting. Activity data (e.g. MWh produced) of key emitting units

within these sectors (e.g. power generators) will be reported.

CCD level reporting, for the NCCC and other national communications. The CCD will perform

the essential role of data interpretation, and GHG calculation.

As before, CCD will specify the indicators and activity data to be provided. JEIS will perform the data compilation and storage role. GHG emission data will be compiled in an emission database, maintained by the JEIS team in coordination with Monitoring and Evaluation Directorate at MoEnv.

The information systems will provide data, and include but are not limited to those data systems in DOS, MEMR, MWI, MoEnv and GAM –other appropriate entities may be identified. The intention is that these reporting units contain representatives from most (if not all) ministerial sectors involved in mitigation activities. An agreement will specify the role and responsibility of these information systems as reporting units. Such an agreement may be reached by a MOU or if necessary, backed by a legal mandate under an environmental by-law.

5.4.2.2 Verifying (and data Interpretation)

At each level of reporting, the following verification requirements will be created:

Information systems units will have the responsibility for ensuring that the activity data they

provide is accurate and performing appropriate QA/QC of this data.

GHG Emissions technical committee (monitoring)

Feedback from outputs to help determine inputs

Climate Change Directorate

Jordan GHG Emissions MRV Framework

Monitoring

Communication

Supporting Climate

Change Mitigation

policy planning:

• Verification

• Sectoral planning

and monitoring

• Identifying priority


Capacity building

to access results

based climate

finance

Creating MBI

readiness,

minimising regrets

Institutional

integration

National sectoral

planning

Ou

tco

me

s

Ministry of Environment (facilitation/oversight)

GH

G R

ep

ortin

g (M

on

itorin

g, V

erific

atio

n)

Sector

Information

Systems

Monitoring &

assessment

Directorate

Department

of statistics

Energy

Information

system

Water

Information

System

Others…

GAM

Environment

studies

JEIS

Data compilation

Data storage, online platform

maintenance

CC Directorate

QA/QC Team

Data checking –

interpretation –

calculation

Jordan GHG

emission

database

Indicator and baseline

definition

National CC Committee

(Monitoring, support and dissemination)

Energy (73%)

Energy Industries

Transport

Manufacturing industries

Commercial, residential,

Others

Emissions Data (% of 2006

GHG)

CCD approved

information filtered

& published by JEIS

Periodic 3rd party

auditing of data


April 2016 Page 51

CCD will interpret this data (with the support of the Monitoring and Assessment Directorate).

Their calculation of GHG emissions will be verified periodically by independent third party

verifiers.

5.4.2.3 Monitoring

Monitoring of these activities will occur through the verification of periodically reported information, a role which will be performed by CCD and the Monitoring and Assessment Directorate.

The Technical Committee and the NCCC will contribute to monitoring in a similar manner as before.

To ensure continuous improvement of the system, data outputs will be evaluated by the CCD team, and improvements to inputs requested from the reporting units if necessary. This will also allow the creation of new indicators or baselines.

A Technical Committee will be the focal point for institutional cooperation and learning. The committee will be composed of technical representatives of the reporting units, the CCD and JEIS, comprising a sub-set of the previous technical committee. The committee will:

Support the integration of existing databases and the developments of new databases (where necessary) by providing necessary specifications

Facilitate the procedures for data sharing, in order to make this an efficient process, moving towards automation

Facilitate knowledge sharing to ensure best practices are adopted for data exchange and integration

Provide an overview of the MRV development process, to ensure continuous improvements ae made

Adjustment of inputs given feedback from the outputs of the process.

CCD will be responsible for sharing key data insights with NCCC, in order to collaboratively inform CC policy making. The NCCC, as a multi-ministerial private and NGO committee, will support in the nationwide dissemination of the key policies, insights and other outcomes.


As before, these activities described are an ideal end goal, which will take longer than the 1st PMR implementation period to fully implement.

Unlike the project activities MRV, activity data is already being collected by the information systems identified.

The focus of the 1st PMR implementation phase will be the capacity building of the reporting and interpretation units (i.e. CCD, Monitoring and Assessment units), in addition to the development of an institutional and IT framework required to develop the MRV Framework.

1. Design of institutional and IT framework for the MRV Framework, which will include:

Mapping of the implementation agencies

Identification of the data required and its format.

Preliminary scoping and design of system.

Stakeholder consultation to identify key roles and responsibilities (as per the stakeholder roles identified above).

Establishment of the Technical Commitee, including the agreement of MOUs between the partcipants and CCD.

Assessing existing IT systems of the reporting units, designing or enhancing IT solutions to improve efficiency and automation of the reporting process, including data processing and storage requirements for the JEIS.

(Note that this MRV Framework is much more complex in terms of the amount of data provided, and therefore more IT heavy than the MRV for projects).


April 2016 Page 52

2. Setting up MRV Frameworks: institutional framework and IT infrastructure, which wil include

Technical assistance to CCD in preparing the Terms of reference. These will include the :

o Definition of the reporting, monitoring and verification requirements for all levels.

o Development of a harmonised approach to emission baseline calculation, and GHG

savings reporting based on a review of existing methodologies, in Jordan and globally,

for reporting on GHG savings of projects.

Defining the responsibility and roles of the implementation agencies, regarding reporting,

monitoring and verification h will be agreed by the technical committee following stakeholder

consultation

Developing MOUs to establish the roles and responsibilities in the MRV Framework as defined

(backed by legal mandates, if necessary).

3. Implementation of the MRV Framework: capacity building, technical assistance and IT resources

Technical assistance and capacity building within MoEnv:

o CCD and the monitoring and Assessment unit, to perform QA & QC, interpretation,

calculation.

o JEIS: data processing role for JEIS in complilation and storage,

Technical assistance and capacity building of Information Systems to support their roles

Procurement and development of key IT infrastructure requirements for JEIS – hardware and software – for internal data compilation, processing, archiving, and web platform for publication

Pilot activities: selected information systems

During the 1st PMR implementation phase, PMR activities will fund the capacity building of the cross sectoral information systems, and possible enhancement of IT systems, particularly for the integration of existing systems with that of JEIS.

Due to limited resources, stakeholders developing projects in key PMR sectors will be prioritised.

Nonetheless, where possible dissemination of guidance via the NCCC will aim to support learning of stakeholders not directly involved in the 1st pilot phase.

4. Delivery of key outputs

Ongoing capacity building to support the analysis of key outputs from emissions MRV e.g. developing sectorial baselines and projections, identification of priority mitigation activities.

Support in policy making, through target setting and in preparation of key policy documents.

Development and dissemination of key findings through the NCCC.

Dissemination of guidance and training materials through the NCCC.

Objectives of the 1st PMR implementation phase and beyond

The focus of this 1st implementation phase is:

Creation of institutional frameworks and procedures,

Development of IT frameworks to support these procedures

Capacity building to enable institutional learning regarding calculation of GHG emissions and baselines, policy planning, and target setting


During the 1st phase, it is expected that the emission database be developed and populated with emissions calculated from the most recent activity data available. Technical assistance will enable the creation of sectorial baselines, econometric analysis and projections of emissions. This will inform mitigation policy making, by verifying the impact of mitigation activities, identifying further mitigation


April 2016 Page 53

opportunities, and enabling target setting. This will largely be delivered through technical assistance, with a strong capacity building element.

In subsequent phases, the focus will be on the automation of IT processes for information exchange, and the development of institutional capacity to interpret and analyse key outputs, in order to inform policy making.

In addition, work will continue with information systems units to develop better indicators, and support the existing data collection process.

5.5 Supplementary activities

In addition to the activities defined above, two additional activities will be undertaken, in the 1st IP, in order to support the development of the frameworks, and their expansion to non-target sectors in subsequent IPs.

Need Assessment and Recommendation for legislative amendment to support MRV framework

Study of readiness of non-target sectors (Transport, Agriculture, Waste) for MRV integration (in existing or new Info Systems)

5.6 Interactions between the two MRV Frameworks: reporting unit roles

Figure 15 illustrates the interaction of the two MRV Frameworks (MRV of Mitigation activities and MRV of Emissions in pilot sectors). The figure provides a “close-up” example of how stakeholders involved in both Frameworks will interact, referring to the kind of data and data exchange channels which will be used.

In this example, JREEEF is the implementing agency, and the responsible reporting unit under the MRV of mitigation activities. It may interact with the Energy Information System to request activity data from projects being implemented – e.g. household energy consumption in a particular region. In order to fulfil its reporting unit requirements under the MRV of mitigation activities, JREEEF has the choice of reporting directly to CCD, or using the EIS as an intermediary to pass on project baseline and GHG savings data. This intermediation may be considered if acceptable to both parties, and cost effective from an IT infrastructure perspective.

EIS primary reporting role is under the MRV of Sectoral emissions, reporting sectoral activity data. However, if possible and cost effective, it would be preferable to use EIS as a reporting unit for both systems, increasing the level of cooperation and information exchange between units.

Figure 15 – Example of possible interactions between the MRV of mitigation activities and sectoral emissions

5.7 Developing an MRV Framework

During the Pilot or 1st PMR Implementation phase, four key steps will lay the foundations for developing the MRV Frameworks. These are illustrated in Figure 16.

JREEEF

Implementation

AgencyEnergy

Information

system

MRV of

Mitigation

Projects

MRV of

Emissions in key

sectors

Sectoral activity

data

Project Baseline & GHG

data

Project Baseline & GHG data

Project activity data

Project Baseline & GHG data


April 2016 Page 54

Figure 16. The MRV implementation journey in the Pilot or 1st PMR Implementation phase

1. Design of institutional

framework for the MRV system

2. Setting up MRV systems: institutional

framework and IT frameworks

3. Implementation of the MRV system: capacity building,

technical assistance and IT resources

4.

Delivery of key outputs of the Pilot Phase

This is the first step in the process. This step must come first to achieve “institutional buy in”.

The recommendations for institutional set up and system design must be tested via stakeholder consultation. Modifications may be needed to ensure acceptability.

Test and check

There are two main phases in the implementation of the MRV systems – capacity building and assistance, and, delivery.

At the end of the 1st PMR implementation phase, or the PILOT PHASE, the systems will begin to support climate change policy making, learning to enable access to RBF, and lay the foundation in a journey towards MBI readiness


April 2016 Page 55

6 Addressing Financial and Technical Challenges: Developing a Pipeline of GHG Mitigation activities

This chapter describes the activities proposed for delivering a pipeline of GHG mitigation activities (i.e. projects, programmes, or sectoral level GHG mitigation activities) in Jordan, and addressing the key challenges identified in previous chapters.

These activities will create market readiness by:

1. Enabling access results based climate finance

B1.Capacity building of Public Financial Institutions Capacity building of public sector funds (JEF and JREEEF) to enable access to climate finance by implementing MRV Frameworks, and supporting accreditation to the Green Climate Fund, and other sources of Results Based Financing (RBF). B2&3. Climate Finance Capacity building programme and Partnership Establishment of a capacity building programme and Partnership to provide RE and EE project developers, financiers and advisers in the private sector, access to technical assistance specifically tailored to obtaining results based climate finance. B5 GHG verification training and accreditation for existing energy service consultants Support the creation of new GHG verifiers by providing training to existing energy service consultants in Jordan helm them become accredited. This activity will be subject to demand and use opportunities to collaborate with other donors’ ongoing activities supporting the energy service provider market development.

2. Increasing institutional and private sector momentum for low-carbon investment and

strengthening stakeholder engagement in mitigation opportunities

B1.Capacity building of JEF and JREEEF Stimulate the pipeline for RE/EE mitigation activities by capacity building of the key public sector funds that play a significant role in catalysing the market. B2&3 Climate Finance Capacity building programme and Partnership Enable access to finance for RE and EE project developers in the private sector through technical assistance to project developers, financiers, and advisers. B4. Upstream policy analysis for alignment and coherence across Ministries Assessment of the legal and political conditions for developing and implementing RE and EE projects in Jordan. One specific activity will focus on review of the PPP and REEE Laws, involving











April 2016 Page 56

the rules governing the direct submission of proposals by IPPs in the REEE Law and the PPP law, to establish whether or not there is a contradiction. Provide recommendations for amendment, if necessary.

3. Strengthening capacity to track, plan and deliver mitigation activities.

B6: Registry of planned projects and potential support. Primarily this will be a governmental planning tool, enabling identification of planned mitigation which require funding. By making relevant information publically accessible it will allow international donors to use this tool for planning and coordination.

These activities will address the key challenges highlighted in Chapter 3, which are further identified under each activity subheading.

6.1 Capacity building of JEF and JREEEF

JREEEF plays an important role in financing and implementing the GoJ’s ambitious plans and programmes in RE and EE, for example those contained in the NEEAP 2013 (Solar Water Heater Programme, street lighting programme). In particular, JREEEF has the potential to catalyse investments in RE and EE projects, by:

Providing demand for a pipeline of RE and EE projects and services through implementation

and financing of government programmes.

De-risking financing to RE and EE project developers (ESCOs) by providing loan guarantees.

Addressing key technical capacity requirements of project developers, e.g. supporting the

development of bankable proposals.

The by-laws establishing JREEEF were approved in June 2015. It is already in the process of launching its first energy efficiency initiatives, in collaboration with numerous co-financiers, and project developers. Nonetheless, capacity building requirements were identified83 to develop robust MRV Frameworks for measuring the GHG impacts of their projects, i.e. quantification of baseline emissions and GHG savings. The activities described in chapter 4 will enable the preparation of guidelines for developing robust MRV Frameworks. These activities focus on developing the project management tools within JREEEF in order to internalise MRV principles into the routine management of ongoing and future projects.

The Jordan Environmental Fund (JEF) has the potential to play a similar role to JREEEF in financing and delivering additional mitigation activities, and has expressed the desire to do so. Achieving this will require a widening of their current role, to include a specific focus on mitigation activity, and development of project selection criteria which include an assessment of the project’s impact on GHG emissions. In addition, JEF lacks the human resources to perform its current role and its operations are temporarily stalled84. The MRP activities will seek to address these issues, and provide the necessary capacity building and technical assistance to support JEF in achieving these objectives. The JREEEF team has expressed the desire to support and collaborate with JEF in the future, in order to maximise their joint effectiveness.

The ultimate objective is that these funds become leading examples for attracting Climate Finance in Jordan.

In addition, in order to support the ongoing sustainability and scaling up of these funds, the proposed activities will also provide support for fund raising and accreditation to the Green Climate Fund.

6.1.1 PMR Activities

1. JEF Organisational development plan and operational support

Key capacity building and technical assistance which will be provided to JEF includes that listed below.

83 Meeting with Lina AL-Mobaideen, JREEEF/MEMR and Rasmi Hamzeh, JREEEF Director June and September 2015 84 Interview with Ms. Hana Al Shihabi, General Director of JEF, September 2015`


April 2016 Page 57

Baseline assessment of JEF’s past and current activities, and resources.

Development of an organisational development plan for the next five years, including

explicit focus on developing robust MRV Frameworks.

Development of new TORs to include GHG mitigation as an explicit focus, and

amendment of JEF by-laws to incorporate these changes, as necessary.

Support in implementing development plans, including:

Development of guidelines for project evaluation and selection, and capacity building of

the JEF team.

Development of processes and tools for managing ongoing projects, including compliance

with MRV requirements for mitigation activities, and capacity building of JEF team.

2. Support for compliance with MRV requirements for mitigation activities

Both JEF and JREEEF will receive technical assistance and capacity building in order to develop processes and tools to comply with MRV requirements. This will include:

Development of processes to monitor, report and verify GHG savings of projects.

Development of guidelines and tools to enable quantification of emission baselines and

GHG emission savings, by collecting data from project developers and other information

systems.

Development and implementation of IT solutions to store and report the monitored

information.

3. Accreditation to the Green Climate Fund

Accreditation to the GCF will requires organisations to meet robust fiduciary standards and environmental and social safeguards.85 JREEEF has expressed the desire to be supported in the accreditation process. The development of MRV Frameworks (step 2 above) to enable the impact assessment of climate finance will be a fundamental step in supporting this aim. In addition the following activities will be carried out:

An assessment of JREEEF compared to the GCF NIE accreditation requirements, as well as legal status and track record on gender. Recommendation and plan for the changes needed to meet these requirements.

Detailed readiness support and capacity building support to implement recommendations.

4. Fundraising support

Both JEF and JREEEF will receive support for fund raising activities including e.g. preparing funding proposals, support in meeting potential investors, organizing networking opportunities.


For JEF, the focus during the 1st PMR implementation phase will be to produce a business and operational development plan for the coming years. This will include fund raising strategies, and identification of the human resources required to implement the current activities which have been stalled. Systems for governance of the funds and project management (including creating MRV capacity) will be developed. Operationally, support will be given to carry out at least one more round of the allocation of funds. In subsequent phases, the focus will be to support JEF in delivering GHG mitigation activities. The roll out and testing of the business plan, including the systems for governance of the funds and project management, will continue to be supported. To ensure ongoing sustainability of the fund, support to assist in fund raising will also be delivered at this stage.

JREEEF is operational; it has more human, management, and financial resources than JEF. The priority for the first phase will be the creation of MRV Frameworks and processes, and development of GHG reduction studies with at least one pilot project. Fund raising strategies will also be developed. Further,

85 http://www.gcfund.org/fileadmin/00_customer/documents/Press/GPFI_Press_Release_2014_11_17_accreditation.pdf

http://www.gcfund.org/fileadmin/00_customer/documents/Press/GCF_Press_Release_2014_11_17_accreditation.pdf


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accreditation to the GCF will be supported, and continued in subsequent phases, along with execution of fund raising support.

6.2 Climate Finance Capacity building programme

Chapter 4 identified a number of challenges in the traditional financing of RE and EE projects, in addition to challenges in attracting “Climate Finance”. Climate Finance, in this context means results based financing targeted at supporting emissions reductions through such RE and EE projects mitigation.

Enabling traditional financing: a necessary pre-requisite to enable climate financing

It is recognised that supporting the financing of traditional RE and EE projects is not the usual remit of PMR funding, since this financing is not necessarily conditional on emission reductions. However, Jordan is at a very early stage of PMR readiness: enabling access to traditional project financing of RE/EE projects is a necessary first step to developing a pipeline of projects. At the same time, climate finance skills of PDs and financiers can be developed. The combination of both will enable the future development of projects with a specific carbon mitigation focus, able to attract results based financing.

The key challenges which were identified earlier are:

Lack of awareness: Financiers and project developers (PD) lack the awareness and familiarity with the particularities of financing RE and EE projects. In addition, they lack understanding of the opportunities presented by climate finance, and the particular requirements such as the environmental requirements and need for robust MRV Frameworks to prove GHG savings. Energy service providers and consultants, who could play a role as verifiers in this market, also lack the awareness.

Lack of technical capacity:

Financiers:

- In particular local banks and microfinance institutions, need support developing new financial

products (based on project finance of RE and EE projects) targeted at this market.

- Require technical assistance for assessing submitted RE/EE projects in terms of technical

assumptions, contractual links and risk assessment.

- Lack recognition of ESPs and the role they could play in the market

- Require support in developing robust project evaluation and selection criteria, and MRV

requirements for project developers as a condition of finance, given their role as

intermediaries for international financial support.

Project developers:

- Lack the capacity to write bankable proposals, and along with energy service consultants or

verifiers, the experience to set up and implement robust project management systems to

comply with MRV requirements.

Therefore, the aim of the Climate Finance Capacity building programme is to provide a platform for:

- Knowledge sharing among the financial and project developer community. The Partnership will draw on the existing knowledge among the community of PDs, financiers (local and international) and donors in a collaborative, knowledge sharing format.

- Awareness raising of the particularities of RE, EE and Climate Financing.

- Identification of key capacity and technical assistance requirements, and a platform for provision of training in order to address these. External expert consultants will be used when required.


April 2016 Page 59


MoEnv will prepare TORs for the Climate Finance Capacity building programme (CFCBP). A private sector contractor will be selected to oversee the development of the CFCBP and provide it with ongoing secretarial and organisational support. The contractor will report to the CCD, which will be responsible for overseeing such activities.

We envisage this contractor performing the following activities:

1. Identification of key capacity building requirements

The first step will be do identify the capacity building requirements of groups of stakeholders. This can be done through a combination of:

Desk-based review of relevant literature and studies

Engagement and consultation of groups of stakeholders, including round tables and interviews, or surveys.

The relevant groups of stakeholders are identified below:

Project developers (financial risk takers) – public (ministries, agencies, funds) and private sector project developers, public utilities (Water, Electricity), ESP and counterparties in PPP, also trade associations such as the JCI, Jordan Renewable Energy Society, Jordan Green Building Council.

Financial institutions – such as representatives of donor funds and development aid,

private commercial banks, government funds (MoF controller, MoPIC PPP unit), climate

finance, microfinance, the Banking Association for Jordan, and banks involved in EDAMA.

Project Facilitators/intermediaries – JREEF and JEF

Technical and financial advisors – EMRC and private sector counter parts, academics, and

consultants including energy service providers and GHG verifiers.

The objective will be to identify not only the technical topic areas which need to be addressed, but the most appropriate structure and mode of delivering training. Regarding the structure, this could include workshops, publically accessible training materials (guidance, videos, and presentations) short or long training courses.

The following subject areas for capacity building have already been identified:

Awareness raising on existing opportunities in climate finance, RE and EE finance.

Development of appropriate financial products – support for project financiers.

Development of approaches to project evaluation and selection: support for project financiers.

Delivering bankable proposals: support for project developers in complying with these

selection criteria.

Assessing GHG impacts of projects: Establishing of MRV requirements for PDs and verifiers,

and support project developers in complying with these.

2. Design and development of capacity building programmes and business model

A limited number of capacity building programmes will be developed. These will seek to address

the concerns of each group of stakeholders identified above, and one programme may involve

stakeholders from different groups.

For each CB programme, the contractor will identify the technical areas and delivery modes will be

as per the consultation in the previous step.

The next step will be to identify resourcing requirements, both technical and financial.

Technical assistance requirements concerns the identification of experts to develop technical

content and deliver the training. This could be performed by stakeholders themselves, or if

required, external experts may be selected. Where necessary, such additional technical assistance

will be sub-contracted.


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Technical assistance. Wherever possible, these programmes will seek to capitalise on related on-

going activities, in order to optimise resources. For example, IFC is currently engaging with public

and private sector financiers in Jordan, seeking to tackle capacity related challenges to mobilising

climate finance. They are interested in cooperating with PMR activities in this field.86 In addition,

JREEEF intends to provide technical assistance for preparing bankable proposals, and EDAMA

has been involved in delivering similar training in the past.

In order to do so, the following activities will be performed:

Mapping of existing programmes. Relevant existing and planned capacity building

programmes, whether government, private sector or donor led, will be identified.

Consultation with stakeholders involved in existing programmes. The process of

developing the Climate Finance capacity building programmes will involve consultation with

organisers.

Financial resources. A limited amount of PMR funding will be available for the development and

delivery of the CB programmes. In order to ensure the sustainability of the training programmes, the

contractor will:

Identify opportunities to develop business models around these CB programmes. The contractor will also engage with sub-contractors, and other relevant stakeholders to identify opportunities. These could be done on the basis of paid membership or paid training courses.

Identify and secure additional sources of funding, e.g. through ongoing public and private sector initiatives, including donor activity.

3. Oversight of delivery of capacity building programmes

The contractor will oversee the development and delivery of the capacity building programmes by sub-contractors, providing secretarial, administrative and stakeholder engagement services. This will include financial administration of programme delivery, where a business model is developed.

Depending on the mode of delivery of the CB programmes developed by sub-contractors, the contractor will cover the cost of venue hire, material creation and publication, e.g. through appropriate web based portals, and dissemination of the events, guidelines and materials.

6.3 Partnership for Climate Action

To further address the issues identified above, a Partnership will be created which will unite experienced stakeholders in order to discuss and generate proposals of financial instruments and policy initiatives which can mobility and enhance access to climate finance in Jordan. The emphasis will be on gathering private sector views.

Two working groups (of approximately 10-20 stakeholders) will discuss the following themes, and the representatives will be competent in technical matters. Note that some of the same stakeholders may be involved in both working groups.

Working groups and themes

Example stakeholder participants Objective and outputs

Finance working group: New climate finance instruments for Jordan

Representatives of associations or key institutions, whose members are RE/EE project financiers and project developers.

Project developers

Develop recommendations and proposals of new instruments or changes to existing instruments. Present proposals to the Jordanian financial community both public and private, including the donor community, MoF and MoPIC

86 Interview with Bilal Rabah Al Sugheyer Investment Officer Middle East & North Africa for IFC, 03/02/2016


April 2016 Page 61

Policy initiatives necessary to mobilise climate funding in Jordan

Financial institutions

Project Facilitators/intermediaries

Technical and financial advisors

Develop recommendations and proposals of policy initiatives to be presented to relevant key ministries: via quarterly briefings.

These working groups will have high level engagement from the Secretary Generals of the MoENV and MEMR, through meetings on a regular e.g. quarterly, basis.


A private sector contractor will be selected to oversee the development of the Partnership and provide it with ongoing secretarial and organisational support. This may be the same contractor as that managing the CFCBP, depending on their capacity.

The contractor will propose a structure and format for the Partnership (e.g. venue, forum, and carry out the following activities:

1. Establishing the Partnership for Climate Action

Creating a participant base

A call for “Expression of Interest” will be issued to the following groups of stakeholders in order to identify and select those organisations who are interested and able to engage in the Partnership:

Project developers

Financial institutions

Project Facilitators/intermediaries

Technical and financial advisors

Format and functioning

The contractor will propose:

- Venue for meetings

- Periodicity of meetings

- Services they will provide – e.g. secretarial services – facilities for sharing of notes/guidance, minute taking, etc.

- Resources for publicising the outcomes of the working group

2. Working group agenda setting

The initial meetings of the Partnership will involve agenda setting, identifying key topics for discussion.

This could include:

- Financial instrument working group: Development of best practice in financial instruments

for climate finance. Discussion of this topic could, for instance draw on experience sharing

from members of the working group, assessment of existing literature by the secretariat, or

invitation of experts to participate in WG meetings

- Policy initiatives working group: Review of relevant existing policy, response to outstanding

policy consultations, or proposal of new policy

Following this process, the contractor will draw up a forward looking (e.g 6 month) plan for the

Partnership working groups, specifying:

- Working group meeting timetable

- Topics of discussions

- Purpose of meeting

- Inputs required (materials, presentations, expert invitees etc) and

- Outputs expected (policy proposal documents, etc)


April 2016 Page 62

3. Funding to ensure sustainability of the Partnership

While it is expected that PMR funds will cover the costs of the contractor for the 1st IP, the contractor

will be responsible for identifying opportunities to develop a sustainable business model for the

Partnership’s operations, in order to ensure its sustainability beyond the 1st PMR IP. This could involve

a paid membership on behalf of participants.

4. Oversight and administration of Partnership activities

The contractor will provide the day to day secretarial services necessary to ensure the functioning of the Partnership, as per the plan developed in the previous step. They will also be in-charge of updating this plan periodically as required. Tasks may also include financial administration of Partnership activities.

The contractor will cover the cost of venue hire, material creation and publication, e.g. through appropriate web based portals, and dissemination of the events, guidelines and materials.

6.3.2 Activities during 1st PMR Implementation Phase and beyond

The first implementation phase will focus on identifying key capacity building requirements, and development of adequate training programmes. Since the training programme will respond to demands, it is expected that more generic or “traditional” financing topics will be prioritised initially. Subsequent training will be aimed at the development of climate finance skills in order to obtain RBF.

In order to ensure the ongoing accumulation of traditional and climate financing knowledge, guidance materials will be created, published and updated at regular intervals. A business model for sustaining the activities of the capacity building programmes will also be developed.

6.4 Upstream policy analysis for alignment and coherence across Ministries

Assessment of the legal and political conditions for developing and implementing RE and EE projects in Jordan. Focus on areas for aligning and coordinating inter-ministerial activities. One specific activity will focus on Review and recommendation of the PPP and REEE Laws. MoF’s PPP unit87 highlighted ambiguity and a potential contradiction in the PPP Law of 2014 and the REEE Law (2012). This contradiction leaves it unclear whether direct proposals for the development of renewable energy projects (and other projects for generating electrical power and connecting to the grid) put forward by independent power producers fall under the remit and should meet the specifications of the REEE Law, or the PPP Law. This could become an obstacle to delivering RE projects in Jordan.


The following activities are proposed:

Assessment of the legal and political conditions for developing and implementing RE and EE

projects in Jordan, by international experts. Substantial ministerial consultation. Identification

of ongoing activities, and recommendations of areas for aligning or improving coordination.

Regarding the PPP and REEE laws specifically, a review by legal experts will identify and

assess the impact of the apparent contradiction in the laws, in consultation with key

stakeholders in MoF and MEMR, and if appropriate,

Development of recommendations for amending the legislation, to send to the legislative

opinion bureau.

87 Interview with Sireen Hikmat, MoF’s PPP Unit.


April 2016 Page 63


All of these activities will be completed within 1st phase.

6.5 GHG verification training and accreditation for existing energy service consultants

As described earlier, there are a number of ongoing activities to support and promote the market of “Energy Services Providers.” ESPs can provide a number of different services. Of particular interest, they serve as both energy service consultants, who can provide energy auditing and GHG verification services, and project developers who will finance and develop RE and EE projects.

Ongoing activities, in Jordan, to support this market include:

Training. Particularly in use of Energy Performance Contracting (EPC), and addressing the

legal challenges to ESP implementation (NERC, JREEEF)

Voluntary accreditation of third parties to carry out energy audits and monitor the impacts of interventions. A private sector led accreditation system for energy service providers is currently being developed by the USAID-funded Energy Sector Capacity Building project by bringing together the three energy associations in Jordan: EDAMA, Jordan Green Building Council and Renewable Energy Establishment Society (REES).

Dissemination. The rationale and procedures for using ESPs and EPC which are integral parts of the initiatives above will be communicated to appropriate stakeholders.

As noted before ESPs may be able to play a fundamental role private sector delivery of RE and EE projects. In particular, with specialised training, they could become GHG emissions verifiers, by using their technical knowledge to verify the baseline emissions and GHG savings studies, developed for projects or programmes.

CDM experience in Jordan highlighted the lack of technical capacity of local experts on CDM (project identification and development including crediting methodologies) which led to increased transaction costs for developing CDM projects. In addition, another key challenge to emerge from Chapter 4 was that financiers need access to an independent, credible reference body for the accreditation of RE and EE projects, to minimise risks


The objective of the PMR activities will be to dovetail and collaborate with the ongoing activities, described above, specifically where they increase the capacity of the private sector to attract results based climate finance. Discussions with stakeholders 88 highlighted a willingness for the PMR programme to do this.

In order to do so, the following activities are proposed, which again may be tendered out to a private sector party:

Engagement with ongoing initiatives, by identifying opportunities for cooperation on training

and voluntary accreditation of verification service providers, particularly private sector led

initiatives.

Identifying the level of interest for developing training programmes for Energy Service

Providers wishing to perform verification activities.

Engagement of verification experts to develop training programmes for interested parties, on

an ongoing basis. Development of a business model for so doing, in order to ensure

sustainability.

Scoping and development of an accreditation programme targeted at verifiers, and in

collaboration with the USAID project.

88 Feedback from the USAID team working with JREEEF and the creation of the private sector lead accreditation initiative for ESCOs, Interview with Grayson Heffner and Majd Suleiman on 03/08/2015


April 2016 Page 64


These activities are scheduled for the later stages of the 1st PMR implementation phase. Within this phase, the intention is to reach-out and collaborate with ongoing training of Energy Service Providers, with a specific focus on verification. In subsequent phases, the focus will pass to the development of a private sector accreditation system for verifiers in Jordan, in collaboration with the ongoing activities of other technical assistance programmes.

6.6 Registry of planned projects and potential support

The MRV Frameworks for mitigation activities and sectorial emissions will allow the identification of mitigation priorities, and will facilitate the planning of mitigation activities. This activity aims to increase awareness and transparency of the planned mitigation activities, and potential support for these (financial, technical, capacity building), in order to facilitate the delivery of future projects as illustrated in Figure 17.

Figure 17 - Tool for enabling the delivery of mitigation activities by increasing the awareness and transparency of planned projects and potential resources

The key objective of the registry is to provide a public platform for:

1. Scaled up mitigation and financing:

Identifying future mitigation activities and programmes requiring support, allowing possible aggregation of projects.

Identifying potential sources of support, and access to scale up financing of aggregated projects.

2. Government and donor planning:

The publication of relevant information will provide clarity and transparency of planned activities. The proposed tool will support and complement existing tools used by MoPIC, MoF and CCD, and the international support community in planning and delivering climate Mitigation activities.

Figure 18 shows how this registry will work.

Figure 18 Publically accessible registry of planned mitigation activities and potential support

MRV of Mitigation Activities

MRV of Emissions in key sectors

Planned Mitigation Activities

Public access registry of planned mitigation activities and climate support

Potential Support

(technical, financial, capacity building_)

• Tool for enabling delivery of

mitigation projects by increasing

awareness and transparency of

planned projects and potential

resources

Delivery of mitigation projects

&


April 2016 Page 65

CCD, MoPIC and MoF will collaborate in order to develop and oversee the development of the registry in collaboration with the primary data providers. NCCC and MoPIC will be provide key inputs to the registry.

The National Climate Change Committee is composed of key actors (line ministries, NGOs and private sector) who collaboratively develop climate change policy in Jordan, including the planning of mitigation activities. CCD will request NCCC to provide regular updates (e.g. quarterly) on the projects they are planning to implement.

The Ministry of Planning (MoPIC) is in responsible for planning the projects and programmes to be developed in Jordan, on a national scale, whether climate focused or not. In order to do this they prepare the Executive Development Plan. This may also be used to identify planned projects and potential support for inclusion into the registry. Similarly, MoF’s PPP unit has oversight of projects and financing sources for all PPP projects carried out in Jordan.

It is envisaged that JEIS’s project registry (once set-up) will be extended to include a planned projects module for the matching platform, JEIS will be responsible for data compilation, verification, and publication.

MoPIC is developing the JAIMS system (Jordan Aid Information Management System). It will map all ongoing projects and programs funded through foreign assistance (grants, soft loans, technical assistance, and twining programs) in various sectors. The intention is to work with MoPIC to explore the possibility of extending JAIMS to include potential support for climate mitigation activities, since JAIMS is already being developed.


The following activities are proposed:

Institutional arrangements for the data system:

Mapping of possible data providers, and identification of appropriate data type and formats.

Scoping and identifying the roles and responsibilities of CCD, MoPIC and MoF.

An agreement will specify the role and responsibility each data provider as a reporting units.

Such an agreement may be reached by a MOU or if necessary, backed by a legal mandate

under an environmental by-law.

Design of the data system

MoPIC/MoF

Data processor,

QA/QC

CCD, MOPIC, MOF

Registry of planned Mitigation

activities and Support

Planned

Activities

(e.g. JEIS)

Data processor,

QA/QC

MoEnv, MoPIC, MoF (facilitation/oversight)

Outcomes

Publication of

planned projects

and planned

support

Planning tool for

MoPIC, MoF,

CDD.

Planning tool for

international

supporting

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MoPIC

JAIMS, oversight of

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National Climate

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Planned

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April 2016 Page 66

Identification of units for performing data compilation, QA & QC, interpretation, publication, e.g. JEIS and/or JAIMS teams.

Assessment of data processing and storage solutions, and the design of additional solutions if required

Assessment of existing web platforms which could be extended to include the registry.

Implementation of the data system

Identification and implementation of key technical assitance and capacity building

requirements for the data compilation teams.

Procurement and development of key IT infrastructure required.

Web publication and maintenance of new registry.


This activity is scheduled for the later stages of the 1st PMR implementation phase. Initial focus will be on reaching out to all key stakeholders (MoPIC, MoF and the donor community) to allow the mapping of future projects and support. In addition, within the 1st phase the potential to extend existing IT platforms for the creation of a public, web-based registry of planned projects and support will be identified.

In subsequent phases, the focus will be on publicising the registry, particularly among the donor community, inviting updates. In addition, capacity building to allow the integration of the registry as a tool for government planning. This phase will also allow for engagement with donors and government to identify candidate projects for aggregation, and scaled up financing, integrated in the MRV Framework.

6.7 Study of domestic market opportunities in Jordan

Sources of demand for credits originating from the scaled crediting mechanism envisaged for Jordan can be classified as either domestic or international.

Domestically, while there is uncertainty as to how the Jordanian market (estimated at 28.7Mt CO2e in 2006) will evolve going forwards, it is expected that there will be some domestic demand for voluntary certifications to achieve carbon off-sets or neutrality.

These analytical studies will be conducted in partnership with the private sector to identify potential sources of domestic demand and its characteristics. Results Based Financing could also create some opportunities for public sector engagement and through various studies the MRP will explore options for Sukuks and other domestic/international financing instruments to support RBF in Jordan.


April 2016 Page 67

7 Organization, Communication, Consultation and Engagement

This chapter summarises the stakeholder engagement that has been carried out in the preparation of this proposal and identifies those that will need to be engaged further during the implementation of the PMR programme. It then sets out the roles and responsibilities of the key organisations that will implement the programme and the indicative in-kind contributions of key stakeholders. Finally a Project Management Unit is proposed who will coordinate the delivery of the programme.

7.1 Stakeholder engagement for MRP development

The preparation of the draft MRP has followed the process set out by the PMR. It involved:

Data gathered from published sources, including for example Jordan’s Third National

Communication to UNFCCC;

Discussions between local consultants and key stakeholders in Jordan;

Direct telephone and email correspondence between the World Bank, international

consultants, and key stakeholders in Jordan;

Video and telephone conferences;

Three missions by the international consultants to Jordan including stakeholder workshops,

round table discussions and face to face meetings

A PMR Core team was established to deliver the PMR under the guidance of a PMR Project Board including representatives from MoEnv who will be responsible for implementing the PMR. In particular, a Technical Working Group was established to guide the preparation of the proposal. Both of these bodies included representatives from MoEnv, MEMR, MEMR, JREEEF, MoMA, GAM, MoPIC and MoF.

In summary over 70 stakeholders in over 25 Jordanian organisations were involved in the stakeholder discussions. The positive engagement and constructive discussions and feedback from these stakeholders will provide a sound basis for implementing the PMR project.

7.2 Stakeholder analysis

At the outset of the project the stakeholders who will need to be engaged during the implementation of the PMR programme will need to be reviewed. However, the following table provides a suggested initial list of key stakeholders to be involved in the PMR activities.











April 2016 Page 68

Public Sector Private Sector

Core organisations

NCCC

Ministry of Environment

MEMR

MWI

MoMA

MoPIC

MOF

JREEEF

JEF

Finance

International Donors including

USAID

Europe Aid

JICA (Japan International Cooperation Agency)

AFD

Canadian Government

Abu Dhabi Fund

Gulf Co-operation Council

World Bank (IFC, IBRD),

European investment Bank

European Bank for Reconstruction and Development.

GIZ

Central Bank of Jordan

Banking Association (ABJ)

Jordan Loan Guarantee Fund (JLGF)

Tanmeyah National Association for Microfinance.

Project developers

Energy Service Companies (ESCOs)

Jordan Chamber of Industry (JCI)

Jordan River Foundation (JRF)

Intermediaries/ Consultants

Department of Statistics

Jordan Standards and Metrology Organization (JSMO)

National Energy Research Center (NERC)

The Royal Scientific Society (RSS)

RE and EE associations

EDAMA Association

Jordan Renewable Energy Society

Jordan Green Building Council


April 2016 Page 69

This includes the main ministries and organisations, but it is noted that coordination and engagement of different Directorates and Departments within these organisations will be vital to successful implementation. As the programme progresses these stakeholders will need to be reviewed to ensure that they remain relevant to the delivery of the programme and new stakeholders drawn in as appropriate.

7.3 Roles and responsibilities for core MRP activities

The roles and responsibilities of the key stakeholders involved in the MRP implementation are described in the tables below. These tables cover:

Table 11 – Roles and responsibilities of key stakeholders within the MoEnv and NCCC

Table 12 – Roles and responsibilities of JEF and JREEEF

Table 13 – Roles and responsibilities of reporting units in the MRV Frameworks

Table 14 – Roles and responsibilities of coordinators of the Registry of Planned Projects and Potential Support

Table 11 – Roles and responsibilities of key stakeholders within the MoEnv and NCCC

Stakeholder Roles and responsibilities of key stakeholders

Minister of Environment

The Minister of Environment will have ultimate oversight of both MRV Frameworks – Mitigation activities, MRV of GHG Emissions - and will facilitate their creation.

The Minister will also have joint oversight of the registry of planned projects and potential support.

Climate Change Directorate, MoEnv

CCD will be the owner of the MRV Framework for mitigation activities, and the MRV Framework for sectoral emissions, with responsibility for the development and maintenance of the system.

CCD will specify the reporting and verification requirements, and harmonised methodology for measuring emission baseline and GHG savings, for reporting units.

For both MRV Frameworks, CCD will perform the data interpretation, verification and calculation, as required.

Support and guidance to data providers in the MRV Frameworks via the technical committees.

Analyse the key outputs of the MRV Frameworks, to draw conclusions and improve CC policy making. Consult the NCCC, and request NCCC support for dissemination of key policy results.

Joint coordination of the registry of planned projects and potential support.

CCD will coordinate and liaise with GEU.

Specification of capacity building and technical assistance requirements to fulfil these roles.

Two full time local junior consultants will be recruited to support CCD in delivering PMR activities (this role will be funded by the PMR budget).

Environmental Monitoring and Assessment Directorate, MoEnv

Will support the MoEnv in interpreting data provided by reporting units, calculating GHG emissions data, and verifying the data provided.

Collaborate with JEIS in order to perform this role.

Jordan Environmental Information System, MoEnv

For both MRV Frameworks, perform the data compilation and storage and management of the relevant databases.

GHG IT specification, development and maintenance

Support in the formulation and analysis of key data outputs.

Publication of data onto publically accessible project registry, and publication of relevant sectoral emissions data.


April 2016 Page 70

Specification of capacity building and technical assistance requirements to fulfil these roles.

One full time local junior consultant will be recruited to support JEIS in delivering PMR activities (role will be funded by the PMR budget).

Green Economy Unit, MoEnv

Ensure the coordination of the national green growth plan with the ongoing Climate Finance Activities under the PMR, by liaising with the CCD.

Provide periodic updates on climate mitigation information (as provided by JEIS) to the green economy to the monitoring and evaluation unit in the Prime Minister’s office.

Liaise with NCCC to provide periodic updates to the proposed Green Economy Steering committee in the PM office.

National Climate Change Committee

Support to the Climate Change Directorate: technical advice on policy making, dissemination of key policies and analyses produced by the CCD among the members of the NCCC, including inter-ministerial dissemination.

Table 12 – Roles and responsibilities of JEF and JREEEF


Jordan Renewable Energy and Energy Efficiency Fund, MEMR

Fulfilment of the MOU or similar agreement establishing role as a reporting unit.

o MRV Framework of mitigation activities: reporting of emission baseline and GHG reductions achieved by mitigation activities to the CCD, as per the data supply and reporting agreement. Identification of a candidate pilot projects for technical assistance to develop baseline and GHG emission savings studies.

Attendance at the technical committees for provision of technical oversight of MRV Framework. Support continuous improvement of the MRV Framework.

Specification of capacity building and technical assistance requirements to fulfil these roles, and carry out the capacity building activities envisaged (accreditation to GCF, Fund raising).

One full time local junior consultant will be recruited to support JREEEF in delivering PMR activities (role will be funded by the PMR budget).

Jordan Environmental Fund, MoEnv

Specification of capacity building and technical assistance requirements to fulfil the roles below, and carry out the capacity building activities envisaged (organisation development plan and implementation).

Among other requirements once fully operational, fulfilment of the MOU or similar agreement establishing role as a reporting unit: MRV Framework of mitigation activities: reporting of emission baseline and GHG reductions achieved by mitigation activities to the CCD, as per the data supply and reporting agreement.

Identification of a candidate pilot projects for technical assistance to develop baseline and GHG emission savings studies.

Attendance at the technical committees for provision of technical oversight of MRV Framework. Support continuous improvement of the MRV Framework.

Two full time local junior consultants will be recruited to support JEF in delivering PMR activities (role will be funded by the PMR budget).


April 2016 Page 71

Table 13 – Roles and responsibilities of reporting units in the MRV Frameworks


Reporting units in the MRV of Sectoral Emissions in pilot sectors

Department of Statistics, DOS

Energy Information System, MEMR

Environmental Monitoring and Assessment Directorate, MoEnv

Water Information System, MWI

GAM Environmental studies and planning department, GAM

Fulfilment of the MOU or similar agreement establishing role as a reporting unit:

o MRV framework of Sectoral emissions: collection and reporting of activity data to inform GHG emission tracking of pilot sectors.

Attendance at the technical committees for provision of technical oversight of MRV Frameworks. Specification of capacity building requirements to fulfil technical committee role. Support continuous improvement of the MRV Frameworks.

(These stakeholders will play an additional role for the MRV of Mitigation Activities: collection and sharing of activity data for baselines and support data sharing, management, and storage given existing IT infrastructure).

Reporting units in the MRV of Mitigation Activities

(Project implementing agencies from each line ministry)

Ministry of Water and Irrigation, Ministry of Energy and Mineral Resources, Greater Amman Municipality, Ministry of Transport and others.

Fulfilment of the MOU or similar agreement establishing role as a reporting unit.

o MRV Framework of mitigation activities: reporting of emission baseline and GHG reductions achieved by mitigation activities to the CCD, as per the data supply and reporting agreement. Identification of a candidate pilot projects for technical assistance to develop baseline and GHG emission savings studies.

Attendance at the technical committees for provision of technical oversight of MRV Framework. Specification of capacity building requirements to fulfil technical committee role. Support continuous improvement of the MRV Framework.

Table 14 – Roles and responsibilities of coordinators of the Registry of Planned Projects and Potential Support


Ministry of Planning and International Cooperation (MoPIC)

Joint coordination of the registry of planned projects and potential support. Provision of data regarding planned support for mitigation activities.

Possible expansion of the role of JAIMS to include data on planned support. Possible support in hosting, maintenance and publication of data for this registry.

Ministry of Finance (MoF) PPP Unit

Joint coordination of the registry of planned projects and potential support. Provision of data regarding planned support for mitigation activities

7.4 Indicative in-kind contributions of key stakeholders

The table below sets out the indicative contributions of key public sector stakeholders who will be involved in the implementation of PMR activities. These values reflect a blended rate of the cost of individual staff members, including salaries and overheads, for the duration of MRP implementation activities over three years. They are assumed to be twice the salary costs of staff members.


April 2016 Page 72

Table 15 – Indicative contributions of key stakeholders

Stakeholder Description of contribution

Indicative total

contribution USD (000s)

Climate Change Directorate Staff time – PMR coordinators for PMU Overheads, space, rent, IT equipment use

144

Jordan Environmental Information System (JEIS)

Staff time – MRV Frameworks staff Overheads, space, rent, IT equipment use

130

Environmental Monitoring Directorate Department of Statistics Energy Information System Water Information System GAM Environmental studies and planning department

Staff time – Attending MRV Framework technical committee meeting, data collection & exchange Overheads, space, rent, IT equipment use

180

Jordan Renewable Energy and Energy Efficiency Fund (JREEEF)

Staff time – implementation of MRV Frameworks Overheads, space, rent, IT equipment use

18

Jordan Environmental Protection Fund (JEF)

Staff time – director's oversight of organisational development Overheads, space, rent, IT equipment use

48

Project Implementing Agencies in line ministries (excluding JREEEF and JEF) e.g. MEMR, MWI, GAM, MOT

Staff time - Attending MRV Framework technical committee meetings, implementing MRV requirements Overheads, space, rent, IT equipment use

72

Ministry of Planning and International Cooperation (MoPIC)

Staff time - mapping of planned projects for "planned projects" registry Overheads, space, rent, IT equipment use

9

Ministry of Finance (MoF) Staff time - mapping of financial support for "potential support" registry Overheads, space, rent, IT equipment use

9

National Climate Change Committee

Staff time - mapping of planned projects for "planned projects" registry Overheads, space, rent, IT equipment use

90

Total indicative contribution 700

7.5 Project Management Unit

7.5.1 Governance Structure

A Project Management Unit will be established to support the implementation of PMR activities. Figure 19 illustrates the proposed structure.

Figure 19 - Structure and role of the Project Management Unit


April 2016 Page 73

The PMR activities will be managed by a number of different stakeholder groups, as indicated in the figure above. The PMU will be composed of:

PMR Core managerial team, composed of staff the Climate Change Directorate, who have been closely involved in the development of the MRP. Their role as project managers of the PMR activities will involve the following tasks:

Overseeing and managing the delivery of the technical activities outlined in Axes A and B, to time, budget and desired quality level. This includes

o Specifying the aims of the activities,

o Contacting and managing relevant stakeholders in order to implement the activities, including for instance developing MOUs with relevant private sector counterparts.

o Identifying technical assistance, capacity building and resource requirements (including human resources) from within the MoEnv, JREEEF, JEF, JEIS and other stakeholders involved in the PMR activities (e.g. the technical committees of the MRV Frameworks) in order to carry out the roles and responsibilities identified in Section 7.3.

Providing periodic progress reports on the activities of PMR to two groups, collecting and considering feedback they may have:

Project Management Unit

National Climate Change CommitteeChaired by the Minister and secretary genral of Environment and includes representative of 10 line ministries, 3 public institutions, 4 research and academic organizations and 4 NGOs.

PMR Core managerial teamClimate Change Directorate

External Project Management Consultants

Project management support

Stakeholder engagementKey ministries and public bodies Reps of (MEMR), (GAM), (MOMA), (MWI), (MoPIC), (MOF) DonorsReps. USAID, GIZ, GGGI, AFD, EBRD, UNDP, UNEPPrivate Sector Partners• Financiers – CBJ, ABJ• Project developers – JCI, JRF, ESCOs• Intermediaries – JSMO, NERC, RSS• Associations - GBC, JRES, EDAMA, etc

Axis A Activities Axis B Activities

Consultants – local, international, junior trainees

Consultants – local, international, junior trainees

Donor CommitteeReps. Of main donors

involved in climate avtities, e.g. USAID, GIZ, GGGI, AFD,

EBRD, UNDP, UNEP


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o Minister and Secretary General for the Environment, who are chairs of the National CC Committee.

o Donor committee

One of the responsibilities of the PMU will be to ensure the procurement of necessary human resources to implementing technical activities (Axis A and B) outlined in this MRP. Such resources include:

International and local technical consultants, including IT experts, contracted for the period of the programme.

Local trainee consultants. These will be recent graduates with some technical ability but not work experience. They will be hired as full time consultants embedded within CCD, JEIS, JEF and JREEEF, in order to support the delivery of their respective organisations’ activities within the PMR programme. Their salaries will be funded by the PMR funds.

In addition, the staff of other line ministries will contribute to the implementation of technical activities, as specified by the “in-kind” contribution in Table 15. It will be the responsibility of the PMU to coordinate and oversee such contributions for the successful execution of MRP activities.

The core managerial team will receive support from external Project Management Consultants in order to carry out the PMU tasks defined above.

The core managerial team will be overseen by and report on a regular basis to the Secretary General of the MoEnv, who will steer these activities. If issues arise requiring higher level of agreement or engagement and coordination with other ministries, this may be executed by the Sec. Gen or escalated to the Minister himself who if necessary may raise it in the Cabinet of Ministers. Significant inter-ministerial cooperation is required for Axis A activities. Issues which may require escalation include the formal adoption of national MRV frameworks (Axis A) and recommendations for changes in PPP and REEE laws (Axis B).

The National Climate Change Committee

The PMU will report to NCCC, chaired by the Minister of the Environment. The NCCC’s has the authority to supervise all the climate change related activities for Jordan. It is made of a range of public, private and third sector stakeholder. They will be consulted and informed of ongoing activities as necessary, and can provide feedback or suggestions. In addition, they may support in the dissemination of information on PMR activities. The NCCC will have oversight of all PMR activities.

The Donor Committee

The PMU will report to DC, who will have an advisory role. The DC will be composed of a collection of the main donors involved in climate change related projects in Jordan will be kept informed of the intentions and progress on PMR activities, to identify opportunities for cooperation where possible. The PMU will also engage with this committee to identify possible future funding streams for activities complementary to PMR objectives.

Stakeholder engagement

Finally, as has been elaborated in respective Sections 5 & 6, relevant groups of stakeholders will be consulted and engaged throughout the process of implementing these Axis A and B activities, providing technical advice to their development. Three groups of such stakeholders are identified:

Ministerial working groups: the technical committees involved in setting up the MRV frameworks under Axis A

Donors – engaged indirectly in Activity B1 (JEF/JREEEF capacity building), but especially through B2&3 Climate Finance capacity building and Partnership for Climate Action, and B5 – GHG verification training and accreditation.

Private sector partners- very greatly involved in Activity B2&3 Climate Finance capacity building and Partnership for Climate Action

7.5.2 Support for financings future implementation phases

A key task to be undertaken by the PMU will be to fundraise to ensure the continuity of PMR activities in subsequent implementation phases. The PMR Core managerial team will receive technical support in order to identify potential donors, and prepare proposals for this funding.


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During these activities, PMR funding will be prioritised as a potential source of funding for subsequent phases. However, where possible supplementary sources of funding may also be sought. Indeed, activities such as the development of a registry of planned projects and potential support for mitigation programmes, are expected to be of value to all donors operating in Jordan in climate related activities. The donor committee will be engaged to identify possible future funding streams for activities complementary to PMR objectives.

7.5.3 Costs of the PMU

The activities to be carried out by the PMU can be split into two phases:

(1) Design and development phase, first 6 months

(2) PMR project management, subsequent 2.5 years

The table below summarizes the activities to be carried out in each phase.

Phase Specific tasks

(1) Design and development phase

Support in specification of the TOR for the activities - determining task objectives, and requirements; determining human and technical resource requirements

Activity management: oversight of ongoing activities, monitoring progress, review of key outputs, feedback and improvement

Stakeholder consultation, and approval during MRV framework and registry development and piloting

Facilitating MOU agreement between key stakeholders and CCD to establish roles and responsibilities in MRV frameworks

Establishing the Technical Committee including MOU agreement

Consultation of technical committee on roles and responsibilities of reporting, verification and monitoring

(2) PMR Project Management

Activity management: oversight of ongoing activities, monitoring progress, review of key outputs, feedback and improvement

Oversight of delivery of capacity building programmes for public sector participation during piloting activity

Fundraising support for subsequent PMR implementation phases.


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8 Summary of Schedule and Budget

The table below summarises the overall costs of activities under Axis A and B. In many instances, the activities in Axis A and B show complementarity in terms of timeline, technical support and assistance required. For that reason, they have been grouped into the four categories shown in the table below.

Activity Budget $,000

1. Design of the multi- tier MRV framework, project registry, match making platform

493

2. Implementation of the MRV framework and pilots; and the project registry and marck-making platform

1231

3. Private Sector Engagement 408

4. Analytical and Technical Studies 450

Project Management Unit (see section 7.5.3) 374

Total budget requested from PMR 2,956

Contribution in kind (see section 7.4) 700

Total Budget of the PMR programme 3,656

The Government of Jordan is therefore requesting $2.956m from PMR to implement the proposed programme, to complement the in kind contribution of $0.7m.

The following Gantt charts provide a summary of the costs of the proposed activities identified in the previous chapters for Axis A and Axis B. The 2nd column of the subsequent charts (“Axis and Activity number”) show which Axis A/B activity the line item corresponds to.











April 2016 Page 1

ACTIVITIES (Supporting Axis A and B)

Axis and

activity

number

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1. Design of the MRV frameworks, project registry, match making platform

1.1.1 Institutional framework: Mapping existing information frameworks of sector

agencies; high-level assesment of IT and technical capabilities; preliminary

design of the MRV framework A1/A2 53

1.1.2 Definition of harmonized GHG Monitoring, Reporting and Verification

requirements for three levels: project, program/agency/Fund and sector; and for

each sector-specific information framework; A1/A2 117

1.1.3 Define specific modifications to existing sector-specific (MEMR, MOWI)

information frameworks to integrate GHG MRV; develop data sharing agreements

for inclusion in the MOUs A1/A2 50

1.1.4 Assessment of JEIS and design for integration of GHG MRV framework

(project and sector) and match making platform (registry of planned projs and

support) in JEIS (home site); define IT solutions for integration with target sector-

specific Info frameworks; develop storage solution A1/A2 and B6 77

1.1.5 Assessment and design of IT solutions and project management tools for

GAM, JREEEF and JEF that meets MRV requirements and storage (in line with the

sector-specific info frameworks) B1 114

1.1.6 Identification and design of Project management tools and technical

capacity building required for MRV framework management and quality

assurance (CCD, JEIS, Monitoring and assessment unit) A1/A2 83

Subtotal Activity 1 493

Year 1 Year 2 Year 3Subtotal

costs

($000s)

Subtotal

costs

(000s)


April 2016 Page 2


Axis and

activity

number

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2. Implementation of the MRV framework and project registry (incl. two pilots)

2.1 Implementation of the MRV framework

2.1.1 Procurement and deployment of necessary IT solutions for integration of

JEIS and the target sector-specific info frameworks and storage A1/A2 100

2.1.2 Procurement and deployment of necessary IT solutions for strengthening

and streamlining of MRV frameworks and storage at GAM, JREEF and JEF B1 74

2.1.3 Design for the integration of GHG MRV in target sector-specific information

frameworks (MEMR, MOWI): development of templates and protocols for

reporting and quality control A1/A2 108

2.1.4 Technical support for CCD A1/A2 50

2.1.5 Technical support for JEIS 122

2.1.6 Technical support for MoEnv's Monitoring Assessment Unit 41

2.1.7 Technical support for target sector-specific Info frameworks (MEMR, MOWI)

for management of GHG MRV component A1/A2 72

2.1.8 Technical Support and Capacity building program on MRV framework and

project management for JEF B1 55


project management for JREEF B1 150


project management for GAM B1 50

2.1.11 Development of guidance and training materials, including GHG MRV

frameworks guide, project level MRV, emission baselines, quality control;

develop guidance for integration with other sector-specific information

frameworks A1/A2 50


costs

($000s)

Subtotal

costs

(000s)


April 2016 Page 3

2.2. Piloting MRV framework

2.2.1 Delivery of broader training (2.1.7) for all participants (MoEnv, target sectors,

JEIS, GAM, JREEEF and JEF), including workshops

A1/A2 59

2.2.2. Pilot MRV frameworks with 2 target sector-specific Info frameworks and for

2 pilot projects including developing specific project emission baselines and

estimating GHG savings potential A1/A2 125

2.3 Implementation of the Registry and match-making platform

2.3.1 Procurement of IT solutions for project registry B6 50

2.3.2 IT Development for web-based registry (incl. database programming, web

interface design) A1/A2 and B6 75

2.3.3 Technical assistance to web-based registry related data provider and

compilation units (e.g. JEIS, JAIMS); Develop maintenance guide/protocol and

provide technical support to the registry host B6 50



April 2016 Page 4


Axis and

activity

number

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

3. Private sector engagement

3.1 Establishing the Climate Finance Capacity Building Programme & Partnership

for Climate Action to support companies and financial institutions working on EE

& RE; develop business/work plan B2 and B3 18

3.2 Scoping of capacity needs of banking sector to scale-up financing support for

medium/small-scale RE & EE projects B2 50

3.3 Scoping of training programme for energy sector companies and energy

service consultants to develop bankable projects B2 and B5 60

3.4 Development and Delivery of training programmes for project developers,

and financiers B2 100

3.4 Development and Delivery of training programmes for energy service

companies companies B5 60

3.5 Oversight and administration of delivery of capacity building programme and

partnership activities B2 120


Subtotal

costs

($000s)

Subtotal

costs

(000s)

Year 1 Year 2 Year 3


April 2016 Page 5


Axis and

activity

number

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

4. Analytical and Technical Studies

4.1 Assessment of mitigation potential in key sectors and progress made till date

in realizing that potential A1/A2 56

4.2 Study of emissions in key sectors: baselines, projections, explore options for

target setting A1/A2 56

4.2.1 Review of Jordan specific Emission Factors A1/A2 55

4.2.2 Study of mitigation policy options: combining progress reports and targets

A1/A2 56

4.3 Need Assessment and Recommendation for legislative amendment to

support MRV framework A1/A2 49

4.4 Upstream policy analysis for alignment and cohesion across Ministries B4 49

4.5 Study of readiness of non-target sectors (Transport, Agriculture, Waste) for

MRV integration (in existing or new Info frameworks) A1/A2 54

4.6 Study of domestic market opportunities (e.g., tradable energy certifications)

in Jordan B7 76



costs

($000s)

Subtotal

costs

(000s)


April 2016 Page 1

Annexes


April 2016 Page 2

A. Historic Emissions

Jordan’s Third National Communication Report (2014) shows that in the baseline year 2006 Jordan emitted about 28.7Mt CO2 equiv. Carbon Dioxide makes up 83.58% of the total GHG inventory, methane 10.75% and Nitrous oxide 5.67%

Table 16 Estimate of Emissions by primary sector for the base year (2006) 89

Sector Emissions (Mt CO2Eq)

Proportion (%)

Energy 20.938 73%

Industrial Processes 2.550 9%

Agriculture 1.318 5%

Waste 3.045 11%

LULUCF 0.866 3%

TOTAL 28.717 100%

The energy sector is the most significant emitter of GHG emissions accounting for 70 % of the emissions. This sector includes both the supply (power generation) and demand sides. The waste, industrial processes, agriculture and LULUCF sectors follow respectively.

The energy industries and transport are the major contributors of emissions within the energy sector.

Industrial Processes Sector:

The main emissions from this sector are CO2 and Non-methane volatile organic compound (NMVOC). 91% of CO2 emissions originated from cement production and this sector was the “second largest source of NMVOC emissions” accounting for 39.5% of Jordan’s total NMVOC emissions.

Agriculture Sector:

The agriculture sector is not a major contributor of GHG. The relevant emissions were methane and nitrous oxide.

LULUCF:

LULUCF net source of CO2

Waste Sector:

Most of the emissions in the waste sector originated from domestic solid waste, whereas wastewater handling accounted for less than 2% of the total waste emissions. The waste sector baseline scenario and emissions trends for selected years were as follows- they were estimated based on projected population growth and GDP:

Years CO2 eq emissions in Gg Total emissions in

CO2 eq Gg Landfills Wastewater Nitrous oxide

2006 2796 320 129 3246

2010 2876 0 141 3017

89 Jordan TNC, 2014


April 2016 Page 3

2015 3140 0 161 3301

2020 3524 0 179 3703

2025 3831 0 195 4026

2030 4154 0 211 4364

2035 4638 0 225 4863

2040 5059 0 239 5299


April 2016 Page 4

B. Projected Emissions

Jordan has carried out a GHG mitigation analysis, which has identified and assessed the potential economic, social and policy measures as well as human interventions that can be implemented in Jordan to reduce the anthropomorphic emissions. The potential mitigation measures have been assessed for the period 2007-2040. For this purpose, two types of scenarios were constructed:

a) Baseline scenario (based on the GHG inventory of the base year 2006):

This scenario assumes business as usual and projects from current levels to future levels of each sector for 2007-2040. In 2006, Jordan’s emissions (including sinks) were estimated to be 28,717 Gg of CO2 eq. This number is expected to increase to 61,565 Gg of CO2 eq in 2040. The energy sector and subsectors will continue to lead as the main emitter of GHGs increasing from 73% in 2006 to 83% of total emissions in 2040. This is why most mitigation efforts will focus on this sector. Electricity and transport remain the leading emitters in the energy sector.

Even though the emissions of the waste sector are meant to increase; the waste total’s share of GHGs emissions is meant to decrease from 11% to 9% by 2040 as wastewater treatment plants have been converted to more efficient once, reducing the amount of methane emissions.

b) Mitigation scenarios:

This scenario incorporates in its projections among others the potential of GHG reductions, effective implementation of environmental policies and “direct and indirect economic impacts.” A total of 43 GHG mitigation activities have been proposed which, if they are all successfully implemented will lead to GHG emissions reductions of about 3.540 Mt CO2 eq per year in 2020 and 5.176Mt CO2 eq per year in 2040. Based on the unit abatement cost and abatement marginal cost curve, the most feasible projects are likely to be in energy and energy efficiency projects with unit costs of between -13 to -274 JD/tCO290.

To better understand the projections in Table 17 and how they have been constructed, the table below highlights the assumptions that have been made in the Third National Communication report.

Table 17: Projected emissions for the baseline and mitigation scenarios between 2007-204091

Year Baseline Scenario

emissions for all sectors- CO2eq (Gg)

Mitigation Scenario

emissions for all sectors- CO2eq

(Gg)

Net Reductions from Mitigation activities for all sectors- CO2eq (Gg)

Reduction %

2016 31456.13 29964.5 1491.63 4.7

2017 32241.27 30412.3 1828.98 5.7

2018 34365.76 31801.5 2564.26 7.5

2019 34824.14 31687.37 3136.77 9

2020 38150.58 34612.58 3538 9.3

2025 39343.27 34507.36 4835.91 12.3

2030 51027.74 46008.15 5019.59 9.8

2035 57082.86 52107.34 4975.52 8.7

2040 61565.42 56389.53 5175.89 8.4

90 Jordan TNC, 2014 91 Jordan TNC, 2014


April 2016 Page 5

C. Main Mitigation Activities and NAMAs

Main Mitigation Activities, supporting policy and implementing actors in the PMR Target Areas

RE/ EE

PMR Target Area

NAMA Objectives and TNC Mitigation Options

Key policy and implementing parties

Cross Sectorial

National policy on climate change: develop of MoEnv’s CC governance capacity

Stimulating the supporting capacity and supply chain for RE and EE industry in Jordan

NEEAP 2013 includes measures to developing the energy services market (through ESCOs) and stimulating the national supply chain for RE and EE, with vocational courses, R&D, incubators and industrial pilots. (JREEEF donors USAID, EDAMA, Jordan Green Building Council and Renewable Energy, NERC)

Numerous international donors are involved as partners to the GOJ.

Creation of the CC directorate, Green Economy Unit. Establishing data collection activities to create baselines for pilot sectors, e.g. through JEIS.

Renew

ab

le E

nerg

y

Independent Power Production

Electricity Generation from solar and wind sources, to achieve 10% RES production by 2020

Photo Voltaic (PV) 200 MW (X2)

150 MW Wind Farm

300 MW Concentrated Solar Power (CSP)

REEE Law 2012 – centralised tendering and direct submission of project proposals to MEMR, advantageous tariffs, tax incentives


April 2016 Page 6

Water Sector

Increasing the share of renewable energy to 10% of the overall power supply relative to 2013.

Solar powered water pumping in Jordanian Valley for small scale farms

Utilization of sludge and other bio-solids to generate energy

REEE phase II pledged 160 Million Euros for Renewable Energy Projects in Jordan and it dedicated 7 million Euros to this, still in design phase.

International donors

The MWI’s Energy Efficiency and Renewable Energy Policy for the Jordanian Water Sector (2015)

Residential Sector

Solar Water Heater Programmes

Roof top Solar power

JEPF supporting RE projects

REEE Law 2012 - Net metering incentives for small scale projects

JREEEF’s implementation of national Solar Water heater programme, with MEMR, NERC, GAM, MoMA, MoT, MIT

Industrial Sector

Identify RE applications for industrial sector to help reduce industrial emissions by 1gg CO2e annually

Encouraging investment in solar and wind energy projects near industrial clusters.

Promotion of ESCO market sector in NEEEAP 2013, and by JREEEF donors USAID, EDAMA, Jordan Green Building Council and Renewable Energy, NERC

NEEAP 2013 RE Pilots on industrial estates

Energ

y E

ffic

iency

Industrial Sector

Identify EE applications for industrial sector to help reduce industrial emissions by 1gg CO2e annually

High Thermal Mass with Low Thermal Mass (LTM) in Ceramic factories:

Returning Un-returned condensate to the feed water tanks in Food Industry:

Insulating the Un-insulated pipes, fittings and tanks in food industries;

Energy Code and mandatory energy audits

JREEEF funding and implementing these programmes

Promotion of ESCO market sector in NEEEAP 2013, and by JREEEF donors USAID, EDAMA, Jordan Green Building Council and Renewable Energy, NERC


April 2016 Page 7

Using Variable Speed Drives in the pumps

Water Sector

Reducing the overall energy consumption in public water facilities by 15% by 2025 relative to 2013. Increase the energy efficiency of water pumping stations through various measures.

JEPF supporting EE projects

NEEEAP 2013: Improvement of energy efficiency in water sector programme, WAJ, MWI, donors GIZ with KfW, JICA.

The MWI’s Energy Efficiency and Renewable Energy Policy for the Jordanian Water Sector (2015)

Buildings: - Commercial, Residential, Public, Governmental

Replacement of lighting (conventional ballasts for electronic ballasts) - commercial sector

Replacement of residential lighting - 1.5mn

Replacement of public building lighting - 50,000

Green Building Code

NEEEAP 2013 programs, for all three sectors.

JREEEF funding and implementation of residential programme, with support of JEPCO and electricity distributors, AFD funding.

MEMR, NERC, main implementers in public and commercial sector. JEPF could have a potential role.

EE in Street lighting

Replacement of street lighting Amman Municipality

NEEAP 2013 measure, for GAM and JEPCO

Suitable Nationally Appropriate Mitigation Actions under development in Jordan Waste and Urban Sectors 92

92 NAMA Database, Jordan http://www.nama-database.org/index.php/Jordan

http://www.nama-database.org/index.php/Jordan


April 2016 Page 8

NAMA Projects Sector Sub-sector Objective

Re-habitation of Al‐Akaider Landfill Waste Decrease CO2 and CH4 emissions from landfill

Zarqa Industrial Waste Water Treatment and Energy Project (ZIWWTE) – provision of industrial treated waste water and energy in Zarqa.

Waste Reduce emissions from waste water treatment plant and generate heat and electricity

Strategy for domestic waste management Waste Reduce CH4 emissions from waste sector by at least 1 Gg CO2 eq annually

http://www.nama-database.org/index.php/Property:Sector_name

http://www.nama-database.org/index.php/Property:Sub-sector

http://www.nama-database.org/index.php/Property:Objective

http://www.nama-database.org/index.php/Rehabitation_of_Al%E2%80%90Akaider_Landfill

http://www.nama-database.org/index.php/Zarqa_Industrial_Waste_Water_Treatment_and_Energy_Project_(ZIWWTE)%E2%80%93_provision_of_industrial_treated_waste_water_and_energy_in_Zarqa.




http://www.nama-database.org/index.php/Strategy_for_domestic_waste_management


April 2016 Page 9

D. Renewable Energy and Energy Efficiency Law, 2012

The government has underlined its commitment to reach the ambitious targets set in the Energy Strategy. To do so, it developed the JREEEF and issued the RE and EE Law in April 2012. With this law, for the first time in Jordan, unsolicited or direct proposal submission is allowed, where investors have the opportunity to identify and develop renewable grid-connected electricity production projects on their own and propose them to the MEMR. The law promotes private sector investment in RE and EE projects. To support this a number of supporting by-laws guidelines and standards are being developed93. These need to be completed in order to have better implementation of EE and RE measures. The key features of this law are:

Centralised Tendering for Large Renewable Energy Projects. In order to support independent power producers (IPPs) the MEMR has been issuing tenders. Developers are allowed to bypass a previously complex bidding process and negotiate directly with the Minister of Energy. Successful projects will sign a Power Purchase Agreement (PPA) with the Bulk Supply Licensee or the Retail Supply Licensee, NEPCO (National Electricity Power Company), and prices stated must be lower than the electricity price cap.

Direct proposal submission to MEMR is also allowed for IPPs.

Net-Metering incentive for small scale projects. The 2012 directive governing the sale of renewable electricity, allows the consumers to install, use and connect to the grid RE systems. In the case of net consumption the user pays the distributor. In the case of net generation, the distributor can roll over the surplus to the next month as long as the balance is cleared by the end of the year.

Tariff premium: if RE systems are of Jordanian origin the tariff can be increased by 15%; however this increase will be taken away once the total grid-connected installed RE capacity reaches 500 MW94

Income Tax exemptions: 100% exemption from income tax over 10 years, to encourage IPP projects to generate electricity on build operate own or a build operate transfer basis. 95

Sales and custom tax exemptions: Exemption of EE & RE equipment from sales tax and custom duties.

93 Energy by-laws to enter into force 2012: Energy Efficiency by-law, RE/EE Exemption by-law, The By-law on Regulating Procedures and Means of Conserving Energy and Improving Its Efficiency, The Directive for the Costs of Connecting Renewable Energy Facility to the Distribution System for Direct Proposals and Competitive Tenders, The Directive Governing the Sale of Electrical Energy Generated from Renewable Energy Systems, The Reference Pricelist Record for the Calculation of Electrical Energy Purchase Prices from renewable energy sources. 94 IEA, Policies and Measures, Elec Regulatory Commission - Directive governing the sale of electrical energy generated from Renewable Energy Systems, http://www.iea.org/policiesandmeasures 95 IEA, Policies and Measures, Renewable Energy Jordan, Renewable Energy & Energy Efficiency (Law No. 13), http://www.iea.org/policiesandmeasures/

http://www.iea.org/policiesandmeasures


April 2016 Page 10

E. Assessment of PMR Target Areas

GAM’s City Wide Approach

The City Wide Approach to development of the PMR activities was proposed during the Organisational Framework phase of activities. This would take a cross sectorial approach to the pilot sectors for GHG mitigation within the city of Amman. As shown in Table 18 the approach focuses on some key challenges faced within Amman and identified in the Master plan, which can be solved by activities which mitigate GHG.

Table 18 – City Wide Approach to GHG Mitigation in Amman

Challenge Solution with GHG mitigation implications

Urban expansion Transport corridor development

Inadequate infrastructure and social services Landfill management

Absence of efficient and effective public transit Bus rapid transit (BRT)

Incompatible land-uses Buildings efficiency, urban planning

Criteria for assessment of PMR readiness of target areas

The following criteria were taken from the GOJ`s Organisational Framework presentation 96 , and enhance by Ricardo-AEA consultants with reference to Jordan’s TNC 2014.

Table 19 – Criteria for assessment of PMR readiness

Category Rationale Indicators

1. Synergy with national sustainable development goals

Indicates whether the target areas are suitable from the perspective of national priorities.

a. Contribution to energy security

b. Contribution to water security

c. GHG Mitigation

i. Cost-effective mitigation

ii. High mitigation potential

2. Institutional and organisational readiness

Indicates the level of readiness for the development of a market mechanisms. This considers whether mitigation activities already exist which can be enhance and scaled, and if the target area is responsive to economic incentives. In addition, this considers whether the right institutions exist to carry out mitigation activities, and how complex this will be (e.g. is it cross sectorial).

a. Existence of institutional and policy frameworks

b. Low complexity of implementing mitigation activities

3. Level of mitigation activity

a. Existence of mitigation activities and programmes, implemented activities

b. Existence of large scale implemented mitigation activities

4. Market Mechanism readiness

a. Prior experience with market mechanisms

b. Responsiveness to economic incentives

5. MRV readiness

Indicates whether the core elements of a GHG MRV

a. Existence of data collection mechanisms

b. Existing MRV data

96 Organizing framework for scoping of PMR Activities for Jordan, Presentation 11 May 2012


April 2016 Page 11

Framework exist, namely data and collection mechanisms, and an MRV Framework.

c. Established MRV Framework

Discussion and assessment of PMR readiness of target areas

Regarding national objectives (category 1), the RE and EE target areas are strongly complementary to national development goals. They target energy security, and achieving high amounts of cost effective mitigation. The waste water and city wide approach on the other hand also tackle the water security issue, but present less mitigation potential.

Regarding the readiness for the development of market based instrument to enhance and scale mitigation activities (categorise 2-4) the same sectors perform best (RE and EE including water). A high level of institutional and organisational readiness exists in these target areas. This is due to a comprehensive and extensive network of supporting institutions and policies or laws which support the development of mitigation actions in these sectors, as alluded to in previous sections. Similarly, substantial attention has been given to the Water sector including the creation of a sectorial strategy, and for Amman’s city wide approach, significant work has been completed by the GAM in the Amman 2025 plan. Nonetheless, both the energy efficiency and the city wide approach have a cross sectorial element, which adds complexity to the development mitigation actions, as covers a larger range of actors, requiring more cross departmental coordination for implementation.

In addition, there are numerous mitigation activities already underway in the first three target areas, as a result of public and private sector initiatives, whereas there is still a relatively limited number of mitigation activities in the Water sector, and in the Amman area, the concept of a city wide programmatic CDM is still under development.

Regarding market mechanism readiness, while the RE and EE sectors (including water) are highly exposed to market signals through the energy prices, and experienced with market based mechanisms such as tendering (RE) and energy taxes and subsidies, the water sector is more protected and only now being opened up to privatisation and competition. Similarly, while no single City Wide market mechanism has yet been developed, different sectors will have varying economic responsiveness and exposure to market mechanisms.

Finally, with regards to MRV readiness (category 5) all sectors have either medium or low scores, indicating the weakness in this field as a whole. As specified in Section 2.2 on data collection for Climate Change, a number of information systems are in the process of being planned and created. This includes an environmental system for reporting on GHG, mitigation and adaptation activities (Jordan Environmental Information System), National Water System, a NERC database for RE and EE indicators, and an energy sector database under MEMR. While there are information sources for electricity production in the RE as part of the national electricity system, energy efficiency sector is particularly lacking in baseline data. In addition, the data collection and MRV Framework for the purposes tracking emissions and planning mitigation activities are still in the process of being set up, under the climate change directorate.


April 2016 Page 12

F. Renewable Energy and Energy Efficiency Projects and Programmes in Jordan

The table below highlights additional RE projects in Jordan to date

.Project Implementer Funders Type of support

Policy/Donor programme

Status

Green Corridor Transmission network - south to north

NEPCO

EIB

AFD

NIF

Project financing

GOJ + Donor Programme

Under due diligence appraisal (time of writing)

JICA: Introduction of Clean Energy by Solar Electricity Generation System

JICA Project financing

Donor programme.

UAE\Abu Dhabi Fund for Development: - Solar Power Project

Project financing

Tendering process to be awarded before the end of 2015 (65-100 MW)

Kuwait\Kuwait Fund for Arab Economic Development: -Wind Power Project

Project financing

Awarded (66 MW) expanded recently to 80 MW under construction

The table below highlights additional EE projects in Jordan to date

Table 20: Key energy efficiency projects

Project Implementer

key stakeholders

Funders Type of support

Policy/Donor programme

Status

Replacement of lighting (conventional ballasts for electronic ballasts) - commercial sector

MEMR NERC

Commercial Sector

Regulation

NEEAP

Government programme

Unclear

Replacement of street lighting Amman Municipality

GAM

JEPCO

GAM AFD (confirm)

Project financing

NEEAP


In progress

Replacement of residential lighting - 1.5mn

MEMR

NERC

JEDCO, EDCO, IDCO, NERC, NEPCO

MEMR AFD (confirm)

Project financing

NEEAP


JREEEF implementing

Replacement of public building lighting - 50,000

MEMR

NERC

ERC, MPWH, NERC

Government?

Project financing

NEEAP


Cancelled


April 2016 Page 13

Local suppliers

Residential solar water heater programme. Three phases, 30,000 installations per phase.

MEMR NERC

Electricity Distributors GAM, other municipalities MPWH, Local Manufacturers, MIT

Home owners Government Support

Project financing

NEEAP


JREEEF implementing

Improvement of Energy Efficiency of WAJ: Phase II: wider roll out of EPCs audit, technical concept development

KfW WAJ

KfW Highland Water Forum

GIZ KfW

JICA

Capacity Building - training

NEEAP 2013


Ongoing

Improvement of Energy Efficiency of the WAJ: Phase II: wider roll out of EPCs soft loans for interventions, public sector energy efficiency fund

KfW WAJ

KfW Highland Water Forum

GIZ KfW

JICA

Project financing

NEEAP 2013


Ongoing

AFD Jordan Energy Efficiency Roadmap

MEMR? AFD Capacity Building - training

Donor programme

Unclear

AFD: Technical Cooperation Agreement with Ministry of Environment

MOE AFD Capacity Building - training

Donor programme

Unclear

Germany: Energy Efficiency in Public Buildings

Project financing

Donor programme

Unclear

UNDP: Support to meet UNFCCC obligations: SNC, NCC, TNC, BUR, GHG Inventory, National Circumstances, Mitigation, MRV Framework, capacity building projects related to EE and labelling, RE and waste.

UNDP Relevant Ministries Consultants

UNDP Capacity Building - training

Donor programme

Unclear

EU: Renewable Energy and Energy Efficiency in Jordan

EU EU Sector programme

Donor programme

Unclear

EU: Capacity building Technical assistance

EU EU Sector programme

Donor programme

Unclear


April 2016 Page 14

AFD: Preparation of JREEEF

JREEEF AFD

AFD Capacity Building - training

Donor programme

Unclear

Water Sector Projects and Programmes in Jordan

Examples of PPP projects in the water sector:

- In Great Amman, the French Company LEMA is contracted for the operation and management of the facilities.

- Aqaba Special Economic Zone: Aqaba Water Company (AWC) is a public company, realizing investments and potentially interested in loans with commercial banks, for instance for its new water treatment plant or for developing Energy Efficiency projects in the pumping stations

- As-Samra expansion project: In 2012 the financing was agreed for a $223 million for the expansion Wastewater Treatment Plant. It is planned to end in 2016. This will increase the amount of treated waste water released into Zarqa River, as well as providing an additional source of irrigation water and also improving the environmental integrity of the river. It is expected to receive and increase in quantities 267000 m3/day to 365000 m3/day


April 2016 Page 15

Table 21. Implemented activities in the water Sector related to EE and RE

Name of Project Started (Yes/No)

Year of completion

Where Activities Added value CO2 or Energy

Re-education

Energy Efficiency No

KFW , Different locations in the kingdom(18 PS& 105 Wells Sites )

Rehabilitation works of water pumping facilities (Budget share with the MWI = 26 million Euro from KFW + 6 million Euro from MWI)

Rehabilitation works of water pumping facilities shall lead to the reduction of the power demand for pumping and the pressure drop in the network as well as achieve better water distribution planning

69,204,592 kWh/year (about 5 million JD) = 50380.94 CO2 TON/ Year emission

WAJ Main Building Solar (PV)

Yes 2015 WAJ Main Building Solar (PV)

Biogas + Hydro Yes 2009 2015 Al Samara Station Generate electricity from Sludge +Water

For Biogas (2009-2015) 1,139,642 CO2 TON/ Year emission

Energy Efficiency Yes 2008 to 2015

Balqa, Madaba and Zarqa.

Energy audits to identify energy consumption in the water sector were conducted in the three governorates of Balqa, Madaba and Zarqa. Measures were also developed to reduce energy consumption.

The energy efficiency of water pumping stations has improved. New operator schemes have been developed and implemented for sub-contracting the operation of pumping stations. Using private capital and donor funds, investments have been made in pumping stations and booster stations.

This translates into a savings of 27,000 tonnes of

CO2 over the

lifetime of the pumping stations

Energy Efficiency Yes Almuntazah (Ghamdan)

Rehabilitation and replacement of Almuntazah pumps station

Increase the effectiveness and efficiency of the power plant


April 2016 Page 16

Energy Efficiency Yes Salt/Albkoreyah

changing the pumping units at the station

Increase the effectiveness and efficiency of the power plant in Albkoreyah

.


April 2016 Page 1

G. Jordanian Banking and Microfinance System

Central Bank’s representation of the Jordanian Banking system.

Figure 20 - Jordanian Banking system in 201397

Jordanian National Policy Framework for Microfinance (2011)

Private Microfinance institutions (MFIs), commercial banks, governmental MFI's, and NGO's make up the microfinance industry in Jordan. An independent report states that while Jordan has been effective in meeting demand is still greater than supply. 98 As of June 2012, the Jordanian microfinance market consisted an outstanding portfolio of over JD150 million, with an average annual growth rate in outreach of 28 percent between 2006 and 2010.99

MFIs are organized at the national level in a network association known as Tanmeyah, In addition, the Al Ittihad has emerged as the national association for microfinance, and some of the MFIs are members of the Sanabel Microfinance Network of Arab Countries.

The chart below contains data from Jordanian National Policy Framework for Microfinance (2011) on the state of the micro-finance sector in Jordan.100

Category Name Total Market Share (2010)

Not for profit Company

Al Watani National Microfinance Bank (NMB)* 12%

Middle East Microcredit Company (MEMCC)* 6%

Microfund for Women (MFW)* 31%

Tamweelcom 25%

For Profit Company

Al Ahli Microfinance Company (AMC)* 3%

Al Amin 2%

FINCA Jordan* 6%

97 Adapted from Central Bank of Jordan, Banking System, 2013 Annual Report, http://www.cbj.gov.jo/uploads/banksys.pdf 98 http://www.bu.edu/bucflp/countries/jordan/ 99 IBRD, “Project appraisal document on a proposed loan in the amount of us$70 million to the Hashemite kingdom of Jordan for the micro, small, and medium enterprise development for inclusive growth project”, Report No: 72284-JO, February 6, 2013 100 MOPIC, The Jordanian National Policy Framework for Microfinance: Towards Inclusive Finance (2011)

http://www.cbj.gov.jo/uploads/banksys.pdf

http://www.bu.edu/bucflp/countries/jordan/


April 2016 Page 2

Commercial Banks Cairo Amman Bank (CAB) 1%

Donor Agency UNWRA 1%

Governmental Agencies

Development and Employment Fund, Reyada 12%

*Sanabel Members

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