The UK’s Exports Credits Guarantee Department (ECGD) has sold 4.5 million British pounds ($7.1 million) of Jordanian Government debt to Metcorp, which will be used to set up an oil recycling plant in the southern port city of Al-Aqaba.
Recycling at the new factory is expected to help reduce pollution that results from oil imports to Jordan, which has no oil reserves itself. Between 5,000 and 7,000 tons of used oil collected from Jordan’s petrol stations and garages will be recycled at the factory every year once it starts production in Spring 2005.
Jordan is one of many countries covered by ECGD’s Debt Conversion Scheme where ECGD is able to swap debt to support economically or socially beneficial projects in the debtor country.
“This will boost Jordan’s manufacturing base in what is currently a largely service-based economy,” said British Minister for Trade Mike O’Brien. At least 15 new jobs will initially be created at the factory by Metcorp under this Debt Conversion Scheme, which will also help reduce pollution from oil currently imported into the country.”
“The sale of £4.5 million of Jordanian debt will reduce the debt burden on Jordan as well as helping the Department achieve an early recovery of the debt,” added O’Brien.
The deal is the second under the ECGD-Jordan Memorandum of Understanding (MoU) signed in January 2001. The MoU allows up to £95 million of the country’s debt to ECGD to be converted into investments in suitable projects. To date nearly £30 million has been taken up.
Under ECGD’s Debt Conversion Scheme, the department sells the debt to an investor at a discount for hard currency with the Department achieving an early recovery of the debt. The investor sells the debt to the debtor Government for local currency with the difference between buying and selling the debt giving the investor a margin and the debtor Government sees its hard currency obligations reduced as well as securing an investment in a local project.
ECGD is the UK’s export credit agency. A separate Government Department reporting to the Secretary of State for Trade and Industry, it has more than 80 years’ experience of working closely with exporters, project sponsors, banks and buyers to help UK exporters of capital equipment and project-related goods and services. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
