Khaberni -The government has pledged a set of economic and financial reforms, covering public debt, energy, water, social and monetary policies, as well as reforms in governance, transparency, and climate, within the framework of the third review of the "Extended Facility" agreement and the "Resilience and Sustainability Facility" with the IMF.
According to a letter of intent addressed to the Fund and translated by "the Kingdom", the government affirmed its commitment to "continue implementing detailed and long-term reforms that ensure macroeconomic stability, support job creation, promote growth led by the private sector, and protect the most vulnerable groups".
Debt Reduction
The government aims to gradually reduce public debt to below 83% of GDP by 2030, through achieving a gradual primary surplus starting in 2025.
This effort includes improving revenue management, broadening the tax base without raising tax rates, and enhancing compliance through expanding the use of electronic invoicing and digital customs control.
In addition, the government has committed to reducing reliance on costly domestic borrowing and increasingly relying on concessional financing from international partners.
Electricity Sector Reforms
The government has committed to reducing the losses of the national electricity company (NEPCO) to below 1% of GDP, and expanding the application of time-of-use tariffs to include 100% of electrical consumption by September 2026.
The plans also include launching new solar power generation projects with a capacity of 200 megawatts, and pilot projects for electricity storage of at least 40 megawatt-hours.
The government will also work to improve the terms of old power purchase agreements and establish a smart control center to enhance the ability to manage loads and track renewable energy sources in real time.
Involving the Private Sector in Water Projects
The government intends to issue competitive tenders to involve the private sector in operating sewage treatment plants, to cover at least 50% of the total capacity, with operating contracts lasting at least five years.
This step aims to increase the proportion of reused treated water to 35% by 2027.
The government will also update the financial sustainability roadmap for the water sector to cover until 2042, and achieve full recovery of operating and maintenance costs by 2032.
The reforms also include restructuring the Yarmouk Water Company by contracting with a private operator based on clear performance indicators to improve efficiency, reduce losses, and increase collection.
Monetary Policy and Financial Stability
The government has affirmed its commitment to the exchange rate of the Jordanian dinar against the US dollar, while the central bank will continue to manage monetary policy to ensure monetary and financial stability. Authorities aim to maintain a larger level of foreign reserves.
Commitments also include improving banking supervision, enhancing risk monitoring tools in the financial system, and implementing disclosure standards related to climate and banking compliance.
Within the framework of the "Resilience and Sustainability Facility", the government has committed to linking financial planning with climate risk analysis, integrating these risks into public investment assessments, and developing a register of fixed assets in vital sectors.
In terms of governance, the government will enhance oversight of state-owned companies, expand the use of electronic procurement, and publish periodic financial reports.
The government's commitments within the current program extend until 2027 and include measurable quantitative and structural goals, subject to semi-annual reviews by IMF missions, starting with the fourth review at the end of 2025.
