Jordan bank signs $360m loan deal to boost electricity

Jordan Islamic Bank on Tuesday signed a loan agreement worth 360 million U.S. dollars with the National Electric Power Company to help the state-owned facility finance its purchases of fuel derivatives.

The murabaha (Islamic mortgage) loan agreement is guaranteed by Jordan's government, Musa Shehadeh, the bank's director general, said in a press statement.

Shehadeh stressed that the deal is aimed to support the official company at a very important time.

The company's losses reached around 5.6 billion U.S. dollars at the end of 2014 after repeated cuts in natural gas supply from Egypt, which the company used for power generation.

Following the cut in Egyptian gas, the company was forced to resort to buying more expensive heavy fuel and diesel for power generation, which incurred losses to the company that used to generate 80 percent of the country's electricity from Egyptian gas.

However, Abdel Fattah Daradkeh, the director general of the electricity company, said the situation is improving after Jordan opened recently a terminal for storing liquefied natural gas.

"The terminal will help Jordan import gas from anywhere in the world after the cut in gas from Egypt," he was quoted by the state-run Petra news agency as saying.

Jordan imports about 97 percent of its annual energy needs at a total cost of 18 percent of the gross domestic product.