The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are expanding their funding for Jordan’s energy sector by issuing a €67.1 million financing package to the country’s National Electric Power Company (NEPCO). The new financing will enhance the country’s electricity transmission capacity.

Details of the Financing Package

The package involves an EBRD loan of €54.7 million and an EU investment grant worth €12.4 million. The funds will construct a new high-voltage substation in northern Jordan to expand the existing and future grid capacity. Apart from the substation, the package involves building four new overhead transmission lines, linking to large substations such as Samra, Amman West, Hasan Industrial, and Jerash.

Supporting Jordan’s Renewable Energy Ambitions

As part of Jordan’s ambitious renewable energy goals for 2030, strengthening its transmission infrastructure is vital. The new substation will add capacity to the grid for renewables and facilitate easier cross-border exchange of electricity. In addition, the project will minimize transmission loss and maximize power flow through the national grid, facilitating the overall green transition.

The project will also receive a technical cooperation package aimed at enhancing skills in the energy sector. An EU-funded €2.2 million grant will fund vocational training for electrical technicians, focusing on digital skills and energy efficiency. This project will equip individuals with the knowledge required to enter Jordan’s growing energy sector.

Gretchen Biery, EBRD’s Head of the Eastern Mediterranean, said,”We are proud to support NEPCO, in collaboration with the European Union, in developing vital transmission infrastructure that strengthens Jordan’s power sector. This project enhances regional interconnectivity and supports the country’s green transition, in line with its Economic Modernisation Vision.”

Also read: EBRD Boosts Ulusoy Un’s Green Transition with €80 Million Loan

EBRD’s Continued Support for Jordan’s Energy Sector

The EBRD has invested close to €2.3 billion in 74 projects since 2012, of which more than €815 million have been invested in energy loans. The bank is playing an important role in financing Jordan’s energy transition and enhancing the sustainability of its power infrastructure.

Mizuho Bank, Ltd., has entered into a memorandum of understanding (MOU) with GenZero, a decarbonization investment platform owned by Temasek. The agreement aims to develop and scale up transition credits, a financial tool that incentivizes the early retirement of coal fired power plants.

What Are Transition Credits?

Transition credits are an innovative financial instrument that helps transition from coal to cleaner sources. The process measures CO2 emissions from coal-fired plants and offsets them by reducing emissions when the plants retire. The reduction is translated into carbon credits sold to retire the plants and finance the transition to renewable energy.

These credits will promote industries, particularly hard-to-abate sectors, to shift towards cleaner energy alternatives, assisting in meeting worldwide carbon neutrality targets.

Mizuho Bank’s Decarbonization Commitment

In 2024, Mizuho Bank revised its policy, imposing stricter criteria for investments favoring the premature retirement of coal facilities. The bank will offer financing support only after confirming that the decarbonization strategies are sound and efficient.

Through its partnership with GenZero, Mizuho Bank will help advance carbon credit financing and collaborate on developing transition credit frameworks. The bank aims to further educate Japanese businesses on the benefits and mechanisms of transition credits.

A Collaborative Approach to Unlock Decarbonization Potential

Frederick Teo, CEO of GenZero, said, “As a major global economy, Japan’s technological capabilities, commitment to climate goals, and active participation in regional and international cooperation makes it an essential market in advancing Asia’s decarbonization agenda.

He added, “GenZero and Mizuho will leverage our collective expertise and regional connections to collaborate on energy transition opportunities, build greater awareness for transition credits, and unlock opportunities to support coal-to-clean initiatives. We look forward to working with Mizuho and other like-minded partners to scale decarbonization efforts, and to drive clean energy transitions, especially in Asia.”

Also read: Mizuho Financial Group partners with asset management firms to drive sustainable finance in Japan 

Mizuho’s Focus on Scaling Carbon Credit Mechanisms

Mizuho strives to make carbon credits a more efficient funding instrument, speeding up decarbonization in the industry. The bank is convinced that large-scale funding by carbon credits will be crucial to reach carbon neutrality, particularly in challenging sectors.