The Temporary Law on Renewable Energies and Energy Efficiency 3 (which became a permanent law on April 12th, 2012 under the Law No. 13) aims to provide the government with suitable tools to reach the National Energy Efficiency Strategy targets.
Since 2007, the Energy Efficiency Strategy targets 7% of Jordan energy mix to come from renewable energy sources by 2015 and 10% by 2020.
According to the new legislation, the Ministry of Energy is responsible for the identification of a list of Renewable Energy Development Zones to increase the productivity of future renewable energy projects. The Ministry shall issue tenders to attract competitive proposals for the development of Renewable Energies on selected sites. As a way to ease the project implementation process, the 2010 legislation allows domestic and international companies to bypass a previously complex bidding process and negotiate directly with the Minister of Energy. Each Qualified Renewable Energy Plant proposal shall contain a development plan, including a preliminary design, an initial financing plan and a contribution of local inputs to the facility, supplies, construction and operation. The applicant shall prove sufficient experience -five years- in the field of renewable energy development and implementation. Each presented project shall clearly state its fixed electricity tariff and be part of a Power Purchase Agreement (PPA) with the Bulk Supply Licensee or the Retail Supply Licensee. NEPCO (National Electricity Power Company) is expected to purchase the entire amount of electricity produced by private producers and will provide grid access to each individual renewable energy project.
The law also sets up the Jordan Renewable Energy and Energy Efficiency Fund (JREEEF). The fund will be financed by national and international institutions, have a legal personality and be ficially and administratively independent. Both national and foreign private companies will be allowed to apply for the Funds support when setting up renewable energy generation projects in Jordan. The Fund provides renewable energy subsidies to privately owned and operated facilities, interest rate subsidies on commercial loans, a Public Equity Fund to support the deployment of private investment in the sector, a renewable energy guarantee facility to ease credit access for energy efficiency and renewable energy project developers and research and technical cooperation grants for targeted programmes and feasibility studies. The Board of Director of the Fund oversees the activities of the Fund, under the chairmanship of the Energy Minister, Secretary-General of the Environment, Planning and International Cooperation and Finance ministers, and three representatives of the private sector.