MIGA Insures Wastewater Treatment Plant in Jordan

MIGA Insures Wastewater Treatment Plant in Jordan

WASHINGTON, DC, June 6, 2006—The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, announced today that it has issued guarantees to Infilco Degrémont Inc. of the United States and Suez Environnement S.A. of France covering their investment in a waste-water treatment plant in Jordan.

MIGA is providing political risk coverage of $2.33 million for the equity and $7.5 million for a performance bond posted by the investors. The guaranteed percentage will be 90 percent for the equity and 27 percent for the performance bond. The guarantee is for a period of up to 15 years against the risk of breach of contract.

The project involves the design, construction, procurement, operation, maintenance, and financing of a new wastewater treatment plant in As-Samra under a 25-year build-operate-transfer (BOT) agreement—the first time this concept has been used in Jordan.

This project marks many firsts,” says Justin Kouakou, an underwriter in MIGA. “It is not only Jordan’s first BOT project, but also the first public-private partnership in the financing and management of a public infrastructure project in the country.

In addition, the As-Samra is the first wastewater treatment facility in the Middle East  to have used a combination of private, local government, and donor financing. Institutions involved in financing the project include the US Agency for International Development, the Government of Jordan, the As-Samra Plant Consortium, and a bank consortium.

Jordan is one of the ten most water-deprived countries in the world. The country’s annual water demand currently exceeds 1 billion m3, having nearly doubled since the mid-1990s.

The lack of water is widely expected to be one of the most serious challenges to Jordan’s economic growth as the population continues to grow,” says Yukiko Omura, MIGA’s Executive Vice President. “Conservation and reuse of water is an essential element of the country’s water strategy.

The MIGA-supported plant will treat wastewater from the Ammanand Zarqa areas (with a combined population of approximately 2.3 million people), replacing an existing overloaded and inadequate waste stabilization pond treatment system. The plant will have the capacity to handle average flows of 267,000 m3 of water daily, which is expected to satisfy local demand from 2015 to 2025.

The reuse of treated wastewater is expected to have the additional benefit of freeing up drinking water by decreasing agricultural and industrial use of potable water. Aside from the economic benefits, the treatment plant will also prevent environmental degradation caused by mixing poorly treated wastewater with clean water.

We are pleased to offer our political risk insurance to help Jordan address its critical need for water in an environmentally sustainable way,” Omura adds.

For information
Angie Gentile, agentile@worldbank.org, 202.473.3509
Farah Hussain, fhussain@worldbank.org, 202.473.2540