If you want to tell people the truth, you’d better make them laugh or they’ll kill you.
George Bernard Shaw (?)
Here is a fun fact:
And for the 2023-2024 rainy season, it rained more in Ras Muneef1 than it did in London. And yet our government comes out with a statement that Jordan is the water-poorest country in the world2.
The water sector is a vital sector that is mismanaged, both from the supply and demand side. We, the people, sometimes overuse and waste as if we had unlimited water resources3. And the government is not capable of constantly supplying this precious resource, nor is it capable of fairly allocating it, nor is it capable of incentivising efficient consumption, capture, and storage.
Jordan has been blessed with a lot of rain. It’s simply a matter of proper resource management.
The same can be said of another vital economic sector that is inefficiently managed: Energy. (In my mind when I criticise the energy situation in Jordan, I am comparing Jordan’s electric grid to that of Denmark4 and Austria5, not to that of Lebanon and Zimbabwe)
So let’s talk about Attarat. Is it a good energy project for Jordan? (TLDR: Yes)
Incipit
Back in the 2010s6, Jordan was facing major energy storms. It was a time of special circumstances, or as we say in Arabic, “Cairo Envelopes”7 . A time that required immediate solutions. The price of a barrel of oil was averaging $100 in 2014. The Arab Gas pipeline was constantly cut off. So the government was desperate to find ways to ensure energy security and have a decent mix of sources without relying on 1 source only. That is the context in which the government signed with Attarat to build an oil shale power plant in Jordan.
Attarat is a consortium between the Estonian (10%), Malaysian (45%) and Chinese (45%) (talk about a Kumbaya globalisation effort of bringing diverse countries to work together).
For convenience’s sake, I will call Attarat the power plant company and will not go in detail on the company itself (or the difference between shale oil and oil shale). What matters is the court case and the price of purchase.
How much are we paying for electricity from them?
The price of purchase according to the National Electric Company is around 0.08 JODs/kWh8 or $0.12-0.13/kWh confirmed by the previous CEO of the company
If you want an interesting discussion, I recommend watching Issam Qadmani’s interview on Youtube
How big is the project?
~500 MW
The current energy mix in Jordan today looks like this (there’s also a lot of confusion in public debates; we need to remember that energy = electricity + transportation)
Even at 0.08 JODs per kWh, Attarat is only 1% of the total mix (could become 15%-20% of electric production at full capacity9) and the total purchase price averages out lower thanks to the other sources. In 2022, 83% of Jordan’s energy needs were imported. With renewables and Attarat at full capacity, our energy imports can be reduced even further.
We also need to account the mining operation for the oil shale. Does the government receive any mining royalties? I’m sure they do. I would love it if an independent impartial audit is made on this project to really get a more transparent picture. Or even better: IPO the company, let the public see the books and benefit from it (there is already another “shale” company publicly listed in the Amman Stock Exchange but that’s for another day).
(fun fact: diesel is used to heat the oil shale… Why they don’t use a big magnifying glass 🔍 in the desert 🌵 to melt the rocks is beyond me)
(Another fun fact: Jordan’s electric generating capacity is around 7 GW or ~59,611 GWh. Our consumption is 20,584 GWh. We overproduce by 1.7 times after taking into account distribution/transmission losses10)
So far this looked like a great project. Attarat alone would cover 1/6th of our electric needs & Jordan has enough shale reserves to last us centuries11. In parallel, the governments of Abdullah Ensour and Hani Mulki also started converting street lamps into LED lights. Both administration also started (loosely) enforcing a law where all new buildings will need to have solar heaters to reduce our dependency on imported diesel. We were moving in the right green direction.
But something went wrong afterwards. All of a sudden some overpaid and unqualified IMF intern publishes their “estimates” saying that the Attarat project will cause more losses to the electric company (NEPCO). The 500 MW Attarat project, insignificant in size compared to all others, will be responsible for most of the losses…
Possible Cause?
The world was riding the anti-China wave and Jordan turned into an economic battlefield for the major superpowers.
As the Attarat power plant was about to start its engines, a court case was filed by NEPCO in December of 2020 at the International Chamber of Commerce in Paris12 (ICC) against this “Belt & Road” project.
After winning against a Saudi owned power plant13, some believed Jordan could also win the case against Attarat. However, many experts knew that the case was a lost cause from the start and that Jordan lost from the moment it started the claim. By that, I mean Jordan did not just lose the case in terms of legal fees paid - it lost its credibility as a safe haven for investors. As the CEO put it in the YouTube video, the case ruined Jordan’s reputation to attract investment… it will definitely increase investment costs by raising the risk factor. Who would want to invest in a country where the guarantor, i.e. the government, comes up and says: “I want to revise all our contracts”.
0 stability = investment flight.
Dies Irae
When Dr. Omar Razzaz became prime minister in June of 2018, dining table gossip kept lauding him as a great thinker who could actually take Jordan out of the bottleneck: “oh as Minister of education, he was always on time. In meetings, he always listened and took notes unlike other ministers who did nothing”. There was a general sense of hope after the riots and the ouster of Hani Mulki.
But things quickly faded as it was evident that his cabinet was comprised mostly of twitter celebrities (“Twitteratis”) and old banking friends. Razzaz’ tenure was filled with scandals and many badly handled cases (public scandals ones include: Drowning in Wadi Azraq, COVID, Teacher’s strike, Social Security). It was clear that he, an ex-World Banker and ex-CEO of Ahli bank, only favoured the banking sector and didn’t pay much attention to the rest of the economy which suffered greatly.
When he took office in the summer of 2018, the national debt level was at 96.1% of GDP. When he left, the debt level was 105% of GDP INCLUDING debt held by the Social Security Investment Fund (even before COVID, GDP growth was slower than debt growth). In 2 years, GDP per capita fell from 2,909 JODs to 2,871 JODs14.
Jordanians were worse off under Omar Razzaz's leadership and yet we still see deranged tweets praising him and are nostalgic for “those days” (I thought Stockholm syndrome was not real).
And now we get another slap in the face with the loss of the ICC case.
Neither did the former PM nor the former Energy Minister come out with an apology to the public, a mea culpa, or for them to voluntarily contribute and pay the court fees out of pocket (I know I’m dreaming). The public and the current government were left holding the bag.
What a legacy!
We went from مش شغلك يا مواطن to دبّر حالك يا مواطن.
I’m just surprised at the hate directed towards current PM Bisher Khasawneh who broke the record as longest serving PM in the last 25 years15 (2nd longest continuously serving prime minister in a single term since 1946 after PM Zaid Rifai).
Merely for taking on the reins on October 2020 showed that he was gutsy enough to take care of the mess left behind by the previous government (despite keeping a legacy hire like the Minister of Energy who immediately pushed for the ICC case against Attarat). And thankfully 🧿 we didn’t get the same amount of grave disasters as the previous administration.
Let’s see now who will come (back) post-elections.
In the end, here is a joke to keep me alive:
“What’s Linkin Park’s favourite exchange rate mechanism?
A Crawling Peg.”
Austria is handing out Climate bonuses to the everyone residing there. The is the green way: https://www.klimabonus.gv.at/en/
Interesting recap and overview of the energy sector during that decade: https://www.tni.org/en/article/the-energy-sector-in-jordan
“ظروف قاهرة”
Numbers from NEPCO’s report: They purchased 993 GWh for ~46 mil JODs so 0.04 JOD/kWh https://x.com/jordanfinance/status/1678263240726282241
And that is why we always hear of the need to export our excess to Iraq or Lebanon: https://x.com/AlMamlakaTV/status/1830963949417963704