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Project Finance in the Hashemite Kingdom of Jordan involves the financing of long-term infrastructure and industrial projects based on projected cash flows rather than the balance sheets of the project sponsors. This form of financing is commonly used for major public works and private sector initiatives such as power plants, water treatment facilities, transportation infrastructure, and renewable energy projects. The legal framework governing project finance is shaped by a mix of domestic legislation, public-private partnership (PPP) models, and regulatory policies that support foreign and local investment, risk allocation, and lender protection.
Engaging a lawyer experienced in Project Finance in Jordan is crucial for navigating complex transactions and legal requirements. Common situations where legal help is required include:
Jordan’s legal landscape for Project Finance is shaped by several key laws and regulations:
Foreign and local lenders benefit from recognized legal protections for their interests, but full due diligence is needed to ensure enforceability of contracts and security arrangements, especially in the context of cross-border financings.
Project Finance is a method of funding where lenders primarily rely on the cash flow generated by the project itself for repayment, rather than on the creditworthiness of the project sponsors. In traditional financing, lenders often look to the company’s overall balance sheet for assurance.
Commonly financed projects include power plants, renewable energy installations, water infrastructure, transportation developments, and large-scale industrial facilities.
Yes, Jordan has a dedicated Public-Private Partnerships Law that sets out the framework for initiating and managing PPP projects, including requirements for transparency and competitive bidding processes.
Yes, foreign investors can participate and often play a major role, especially in sectors like energy. There are specific rules and incentives for foreign investment, but compliance with local law and partnership with Jordanian entities may be required in certain sectors.
An SPV, or Special Purpose Vehicle, is a legal entity separate from its sponsors, created specifically to develop, own, and operate the project. It limits financial and legal risk exposure.
Lenders can take security over both moveable and immoveable assets, receivables, shares, and contractual rights, subject to proper registration and issuance of security documentation under Jordanian law.
Yes, the Investment Law provides tax exemptions and reductions for qualifying investments, particularly in energy, infrastructure, and industrial sectors.
Many agreements include arbitration clauses, often specifying forums such as the International Chamber of Commerce or the International Centre for Settlement of Investment Disputes. Local courts may also have jurisdiction depending on the agreement.
The time frame varies depending on the nature of the project, sector, and involved government agencies. Complex projects may require several months for full approval and permitting.
Immediate consultation with a lawyer is advised. They can review the contracts, identify remedies, and initiate appropriate dispute resolution mechanisms, whether through negotiation, arbitration, or litigation.
Several institutions and organizations in Jordan can provide guidance and support in Project Finance:
If you are considering engaging in a Project Finance transaction in Jordan or have legal concerns regarding an ongoing or planned project, the following steps are recommended:
Professional legal support can be invaluable in identifying potential risks, ensuring compliance, and increasing the likelihood of a successful project outcome. Begin your search for a qualified legal advisor or law firm with direct experience in Project Finance within Jordan.
