Closed Compact Report: Jordan Compact | September 2018

As-Samra Wastewater Treatment Plant Expansion Project

  • $93,030,000Original Compact Project Amount
  • $97,882,950Total Disbursed

Estimated Benefits

Estimated benefits are included in the Wastewater Network Project table.

Project Description

The As-Samra Wastewater Treatment Plant was constructed in 2008 with support from the U.S. Agency for International Development (USAID) to replace the highly polluting waste stabilization pond system outside Amman, and is the primary facility for treating wastewater from Jordan’s Amman and Zarqa Governorates. However, the demands of a growing population had pushed the capacity of the plant to its limits. Without an expansion to properly handle the region’s growing volume of wastewater, the plant would be overloaded, its ability to treat wastewater would deteriorate, and downstream agricultural areas that rely on treated water for irrigation would face serious food safety risks and the loss of markets for agricultural products. The objectives of the As-Samra Expansion Project were to (i) increase the capacity to treat wastewater from Amman and Zarqa Governorates, (ii) increase the volume of treated wastewater that is available as a substitute for freshwater for non-domestic use, and (iii) protect existing agriculture from the potential consequences of pollution from untreated wastewater.

Under a project finance public-private partnership, with help and a funding commitment from MCC, the plant underwent an expansion and technological upgrades, which allowed the Government to treat 70 percent of the country’s wastewater and meet the region’s wastewater treatment needs through 2025.The plant has improved the long-term sludge management and disposal practices and helped preserve Jordan’s scarce water resources. The expanded plant provides 133 million cubic meters of high-quality treated water per year – equivalent to over 10 percent of Jordan’s entire annual water resources – for irrigation in the Jordan Valley.

At the end of the compact, approximately 375,000 households (2,023,000 individuals) in the Zarqa Governorate and neighboring Amman benefitted from the project through additional supplies of freshwater transferred to these areas as larger volumes of treated wastewater were made available for substitution in agricultural applications in the Jordan Valley. This included approximately 8,500 households in the Jordan Valley (46,000 individuals) that receive consistent supplies of high-quality treated wastewater that can be used for irrigation. The As-Samra plant also provides bio-solids for potential reuse in fertilizer and fuel, and produces nearly 13 megawatts of energy, or 80 percent of its own energy needs, from biogas and hydropower, making it one of the most modern and energy efficient treatment plants in the Middle East.

Additionally, unused budget identified during implementation of other parts of the compactwas reallocated to the project to purchase four high pressure jetting sewage cleaners enhance system maintenance and capacity, thereby leading to a longer life-span of the sewage lines. More information can be found in the Compact Changes section below.

The project was financed as a public private partnership using a build-operate-transfer arrangement. In these arrangements, a government assigns responsibility to a private sector entity to finance, design, build, operate, and maintain the facility for a certain period. The As-Samra expansion was financed in partnership with the Samra Wastewater Treatment Plant Company Limited (SPC), a private company that built the original plant and operates it under a concession from the Government of Jordan. Under this arrangement, the compact covered half the cost of construction, while SPC mobilized debt and equity funding to cover the remaining construction costs, along with project development and design, project management, and interest costs. Due to the grant nature of MCC’s investment, the project was more affordable for the Government of Jordan and financially attractive for SPC and Jordanian banks. MCC’s grant did not subsidize the private sector, as the private investors earn a return only on their investment.MCC’s involvement also reduced the cost of capital, allowing lower water and wastewater tariffs to consumers than might otherwise had been necessary. Through this financing method, the private sector not only provided over 50 percent of the cost of construction, but it assured the Government that the facility will be operated and maintained at world class standards for 25 years. At the end of the concession period, in 2037, the agreement requires that the facility be transferred back to the Government of Jordan in good working order and at no additional cost. The project won international awards, including the “Water and Energy Exchange International Award for Innovative Financing,” and the “Best Water Project Award” by World Finance Magazine.

The project represented MCC’s first major participation in a build-operate-transfer agreement, and its role in providing what is referred to as “viability gap funding” was critical to expanding As-Samra. MCC also provided grant funding for the Jordanian government to hire transaction advisors to assist the Ministry of Water and Irrigation in the project’s commercial negotiations.

Evaluation Findings

The As-Samra Expansion Project is designed to raise the capacity of the existing treatment plant to prevent release of polluted effluent and ensure that the additional wastewater volumes resulting from the Water Network Project and Wastewater Network Project investments will provide clean, treated wastewater for irrigation to farmers in the Jordan Valley. With access to additional treated wastewater, the project expects that farmers will switch from fresh to treated water, freeing up fresh water for higher value uses by households and business in Jordan. The impact evaluation utilizes a natural experiment that varies the amount of treated wastewater available to farmers across the Jordan valley and a complex water balance model to assess whether farmers use additional treated wastewater and the economic impact of that switch.

Preliminary analysis at the end of the compact indicated that increased wastewater flows to As-Samra are generating a greater volume of clean, treated water for irrigation and that farmers are changing their farming practices to take advantage of this new water supply.

Status of the evaluation
Component Status
Baseline Report Completed in 2017
Midline Report Analysis complete 2017, report writing ongoing
Final Report Surveys to be completed in 2018

Key performance indicators and outputs at compact end date

Key performance indicators and outputs at compact end date
Activity/Outcome Key Performance Indicators Baseline End of Compact Target Quarter 1 through Quarter 20 Actuals Percent Compact Target Satisfied
As-Samra Expansion Project

Outcome: Increase the volume of treated wastewater available as a substitute for freshwater in agricultural use

Treated wastewater used in agriculture (%) 61 70 71 111%
Quality of As-Samra effluent meets standard (days) 0 0 1 100%
Volume of waste water effluent discharged from the As-Samra plant per year (cubic meters) 65,000,000 99,000,000 109,445,676.78 131%
Agriculture use of treated wastewater (hectares) 13,700 15,900 12,100 -73%
Expansion of As-Samra Treatment Plant (%) 0 100 100 100%

Explanation of Benefits

The As-Samra Expansion Project successfully increased the amount of clean, treated water (quality effluent) available to farmers for irrigation in the Jordan Valley. Despite the increase in available treated water, agriculture use of treated wastewater by farmers in the Jordan Valley fell over the course of the compact. This reflects a broader decline within the Jordan Valley in the total number of hectares under cultivation. The impact evaluation, which is designed to capture the isolated the impact on farmers of increased access to treated water, found at midline that farmers increased the amount of treated water that they used on their farms and began shifting cultivation from fruits to vegetables to better take advantage of the additional water. The endline survey will examine whether this result is sustained.

Footnotes
  • 1. The goal of MCC’s investment was to sustain the quality of As-Samra’s effluent and avert any potential for contaminated discharge. This is reflected in the 0 baseline and 0 target.