The document summarizes the keynote speech given at the 1st New Energy Conference in Amman, Jordan. The speech discusses Jordan's fiscal challenges related to energy imports and prices. It outlines opportunities for renewable energy to address these issues and help diversify Jordan's economy. The speaker notes that increasing renewable energy capacity could reduce electricity price volatility and make Jordan a hub for renewable research and industry in the region. Banks are urged to provide financing for renewable projects of all sizes to support this transformation. The keynote highlights Capital Bank's existing initiatives to finance green projects through a partnership with the French Development Agency.

1. The 1st New Energy Conference – by EDAMA
September 16th, 2012 / 10:35 am – 11:35 am
Kempinski Hotel – Amman
“Opportunities for suppliers and investors in Jordan, a gateway to the
region”
Fellow colleagues,
Distinguished guests,
Ladies and gentlemen,
First of all, I would like to thank EDAMA, ME Orient and Petra Events
Management for organizing such an invaluable platform.
It is really my pleasure to be with you today at the 1st New Energy Conference
in Jordan.
Challenges
Now most of us know the fiscal challenges the country is facing including:
 The Budget deficit
 The increasing Public debt
 The increasing pressure on the country’s foreign currency reserves
One very important factor or driver behind all this is the cost of energy
including oil and gas.

2. The biggest public FCY spending is being made on importing oil & gas.
Add to this, the instability of gas supply coming from Egypt.
Another challenge is that although oil prices are increasing, thus pushing the
cost of generating electricity upwards.
The government was unable to increase electricity prices until recently.
Causing NEPCO (which is 100% owned by the government) to incur
accumulated losses due to the big gap between the cost of energy and the
selling price of electricity).
According to the IMF fiscal support program, electricity prices will go up
gradually in the coming 4 years in order for NEPCO to be able to recover the
losses and breakeven.
Opportunities
Now, increasing electricity tariffs on one hand is negatively affecting
Jordanians’ disposable income in the immediate short term.
On the flip side, this will make renewable energy power plants projects more
feasible, thus increasing their share in the country’s future energy mix,
accordingly should drive electricity prices down in the future and reduce their
volatility.
(The new energy master plan of Jordan aims to increase the renewable energy
share in the energy mix to 10-20% by 2020).
This is in addition to the favorable effect of renewable energy on environment
due to its efficiency and clean generation of power (green energy).

3. Also it will definitely have a developmental role in the economy at large. If
Jordan succeeds in growing the renewable energy sector, it will be the
country’s niche, expertise.
Jordan may become a hub for R&D on this sector in the region. Universities
may add special programs on this. With increased demand, Jordan could also
play a role in production of components and parts.
More businesses whether SMEs or corporates will operate and invest in this
sector, in the establishment phase, maintenance phase and so on.
Role of Banks in Jordan
Now Banks can and should play a very important role in providing finance for
this sector.
The banking sector currently has around JD 2 billion in excess liquidity (about
USD 2.8 billion).
Part of this liquidity can be used to finance investments in the renewable
energy sector whether by individual banks, club deals, syndications, bond
offerings, equity offerings …etc.
Off course investment in wind and solar power plants would require a power
purchase agreement under BOT or BOO deals or clear feed-in-tariffs for smaller
scale projects.
Importantly, I think that we should keep in mind that for real renewable energy
transformation in the country, projects of all scales needs to be developed. It is
no coincidence that in Europe for example, and despite lower sun intensity in
many areas, renewable energy projects range from a huge number of very small

4. scale projects on private residential and commercial properties to larger utility
plants. Banks’ services can range from medium sized loans to interested
parties to participating in larger syndications.
However and as for the Mega investments in energy projects such as nuclear,
oil shale and others, financing would have to come from regional and
international support, funds, grants, donations as the government is seeking to
invest multi billion dollars by the year 2020.
Capital Bank
As for Capital Bank,we have always given green finance and energy finance a
very important part of our strategy.
We believe that financing the energy sector generates good profits in a sense
that it has a developmental role in the economy as well as it emphasizes our
corporate social responsibility and demonstrates our capacity to keep pace
with global trends and social priorities.
Our benefiting clients range from individuals wanting to buy solar water
heating systems, or energy saving lighting equipment and devices, to SMEs and
corporates investing in solar photo voltaic systems whether suppliers or their
customers (and that includes schools, warehouse facilities, households …etc.).
Our financing is also targeting customers who have the spare space to install
solar cells and want to lease it as well as those who need to reduce their cost of
electricity.
We are also very proud and honored of being the first Jordanian Bank to sign
an agreement with the French Development Agency (AFD) to provide subsidized

5. and long-term financing for green projects focusing on the main pillars of
renewable energy, energy saving and pollution control.
As part of the agreement, AFD will provide Capital Bank with USD 7 million to
fund these projects. The amount can be increased up to USD 53 million, with a
maximum USD 5 million for each loan. (Financing can be in JOD or USD, and
for a tenor of 13 years including up to 3 years grace period).
And as we speak, we have started financing projects in the fields of solar
power, recycled fuel & oils, waste water treatment facilities and other
businesses, whether being refinanced from the AFD line or from our own
funding.
Distinguished guests
In the last few years, the energy sector has become a promising sector that will
contribute to strengthening Jordan’s national economy while at the same time
preserving the environment.
Finally, allow me to sincerely thank you all for this great gathering. Jordan’s
economy and environment will certainly benefit from your gracious
commitment.
Thank you.