GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a portfolio guarantee of JOD 24.8 million (c. USD 35 million) to Capital Bank of Jordan, for a portfolio of JOD 88.6 million (c. USD 125 million), as the first bank in the country to close such a transaction. It will enable the bank to grow its infrastructure portfolio which is aligned with the PIDG 2023 – 2030 strategy focused on climate adaptation and mitigation transactions.

The announcement happened on the sidelines of the visit of the Jordanian Minister of Investment Ms. Kholoud Saqqaf to the UK to promote Jordan as an investment destination. It was made at the Embassy of Jordan in the UK in the presence of the minister of investment and the Jordanian ambassador to the UK Mr. Manar Dabbas.

With a growing climate infrastructure financing gap, Jordan’s Nationally Determined Contribution (NDC), a climate action plan to cut emissions and adapt to climate impact, is now aiming to reduce emissions by 31 percent compared to a business as usual scenario, which is an increase from 14 percent set out in its initial NDC. While the Government of Jordan is expected to invest 5 percent of the financing requirement for these goals, 95 percent is expected to be mobilised through the private sector.

Through the portfolio guarantee, GuarantCo’s transaction enables Capital Bank of Jordan to continue providing infrastructure finance to further invest in Paris aligned, sustainable infrastructure.  GuarantCo hopes that the demonstration effect of the transaction can catalyse similar guarantees across the region to enable continued financing of climate adaptation and mitigation infrastructure finance.

The transaction will make a direct contribution to SDG 9.1: Develop quality, reliable, sustainable and resilient infrastructure to support economic development and human well-being and 8.5: Achieve full and productive employment and decent work for all women and men.

Ms. Kholoud Saqqaf, Jordanian Minister of Investment, said: “Today's partnership announcement between GuarantCo and Capital Bank of Jordan is a testament to Jordan's commitment to fostering sustainable infrastructure development and attracting vital investments. As we work to promote Jordan as an attractive investment destination on the global stage, this collaboration aligns perfectly with Jordan’s ten-year economic modernisation vision and Jordan’s Nationally determined contribution. By mobilising private sector investment in climate-aligned projects, we are not only advancing our economic goals but also contributing to the global effort to combat climate change. This transaction exemplifies the power of strategic partnerships in driving positive change and unlocking opportunities for sustainable growth.”

Layth Al-Falaki, Chief Executive Officer of GuarantCo, said: “We are delighted to close our first transaction with Capital Bank of Jordan and our second transaction in the country.  This transaction is fully aligned with our climate adaptation and mitigation ambitions as outlined in the recently launched PIDG 2023 – 2030 strategy. The increase in infrastructure project financing unlocked from this portfolio guarantee, combined with volumes from potential similar guarantees replicating this transaction in the region, will lead to a much needed infrastructure improvement to the benefit of local people.”

Jamal AlQudah, Group Financial Institutions Director at Capital Bank of Jordan, said: “With this partnership and the portfolio guarantee from GuarantCo, we are taking a significant step toward enhancing the infrastructure landscape in Jordan. This will also contribute to fulfilling our commitment to sustainable and climate-resilient infrastructure, aligned with the aspirations of our nation. We look forward to expanding this model to other regions where we operate, furthering the positive impact on communities and economies.”