(MENAFN- Jordan Times) Japan has decided to extend a low interest, long-term loan to Jordan worth JD110 million ($156 million) to finance development projects listed in 2012 state budget.
The announcement of the soft loan was made on Tuesday when Minister of Planning and International Cooperation Jafar Hassan and Japanese Ambassador to Jordan Junichi Kosuge signed the exchange of notes for the loan to finance the Human Resource Development and Social Infrastructure Improvement Project in the Kingdom.
According to Hassan, the interest rate of the loan is less than 1 per cent (0.95 per cent) and the maturity period is 20 years including a six-year grace period.
The government's policy is to secure soft loans or low-cost borrowing to finance the deficit in the state budget to reduce borrowing from local banks which is costly, Hassan said.
This is the first time in 13 years Tokyo has extended such a soft loan to Jordan, the Japanese diplomat said during the signing ceremony.
Jordan is facing serious fiscal challenges due to the repeated interruption of natural gas supplies from Egypt and the need to assist Syrian refugees, Kosuge said, adding that the Kingdom's economy has also been hit by regional turmoil.
The funds, to be extended by Japan's International Cooperation Agency, will be used to finance development schemes in various fields including vocational training, higher education and medical institutions in impoverished areas, the ambassador explained, noting that it usually takes "a very long time" to decide on the provision of a soft loan but due to the financial situation in Jordan, the loan agreement was concluded in an exceptional short time.
Hassan pointed out that 60 per cent to 70 per cent of the loan will be used this year, saying that Japanese support has enabled Jordan to implement a large number of projects over the past decades.
Since 1974, when the Japanese embassy was opened in Amman, Tokyo has provided Jordan with around JD2.8 billion ($4 billion) in official development assistance in various fields such as water, environment, health, education and vocational training, according to the figures provided by the embassy.
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