Scaling up investment in clean energy – especially in renewable power – is critical to successfully implement the 2015 Paris Agreement on climate change, while addressing many of the economic and social challenges of developing, emerging and developed countries. Key challenges for Jordan include: sustaining economic growth; improving energy security; reducing fossil-fuel consumption and imports; reducing fiscal pressure linked to costly support to fossil-fuel imports; and creating local jobs.

Scaling up investment in renewable power can significantly contribute to addressing many of Jordan’s crucial challenges. These include: sustaining economic growth; improving energy security and reducing fossil-fuel consumption and imports; and reducing fiscal pressure linked to costly support to fossil-fuel imports. Unlike some of its neighbours in the Middle East and North Africa (MENA) region, Jordan has few fossil-fuel resources of its own and imports around 96% of its total primary energy supply. Concerns over energy security and fossil-fuel imports dependency have intensified in Jordan due to political events in the region, including gas supply interruptions since 2011, and more recently, the rapid growth in energy demand caused by a large influx of more than one million refugees and asylum seekers, mostly from Syria and Iraq.

To provide relevant context for the consideration of investment in renewable power in Jordan, this section provides a brief overview of Jordan’s economic and energy trends. Jordan’s economy has exhibited moderate economic growth for a number of years, but has struggled with energy security and supply challenges, as well as large current account and fiscal deficits leading to rising public debt. These imbalances are closely linked to the regional refugee crisis and the structure of Jordan’s energy sector. Securing energy supply is a key priority for the energy sector, to cope with: high energy dependency; frequent exogenous shocks due to regional conflicts; high electricity costs; rapid growth in demand for electricity; a high ratio of energy imports to total imports; and high levels of support for fossil fuels. These challenges all point to the need to scale up investment in domestic energy supply, and especially in renewable power generation,1 in order to sustaining economic growth, improving energy security and reducing budget pressure associated with fossil-fuel imports.

This chapter reviews Jordan’s current policy and regulatory framework for investment in renewable power, including key policy reforms implemented to date to support such investment. The Government of Jordan has provided significant support to renewable power over the past decade. Jordan has put in place several laws, regulations, targets and incentive schemes to promote investment in renewable power, especially in solar PV and wind energy projects. This chapter also takes stock of increasing investment flows in renewable power in Jordan since 2013.

The Jordanian Government has implemented very promising initiatives to help mobilise investment in renewable power. Based on in-house research, literature review, interviews and stakeholder consultations, this report provides non-prescriptive suggestions for Jordanian policy makers to consider in order to enhancing the already robust and comprehensive legislative and regulatory framework for investment in renewable power. The suggestions span all policy areas covered by the Policy Guidance for Investment in Clean Energy Infrastructure. This report also identifies the key challenges faced in each of these areas and proposes concrete measures for addressing them.