Water Governance in Jordan

Overcoming the Challenges to Private Sector Participation

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This report assesses the main governance and financing challenges to private sector participation (PSP) in the water supply and sanitation sector of Jordan, and provides ways forward to address them, based on international experience and OECD compendium of principles and good practices. Using the diagnostic analysis of the governance challenges to PSP in the Jordan water sector (Chapter 1), the report identifies ways forward to overcome bottlenecks focusing on three key pillars (Chapter 2): i) managing public-private partnership in a fiscally constrained environment through appropriate budget processes; ii) reducing the regulatory risks through supporting the development of a high-quality framework; and iii)managing and enhancing stakeholder engagement to improve accountability and buy-in. The report also includes an action plan with concrete measures to implement the recommendations proposed in the report.

The report has been developed as part of a water policy dialogue conducted by the OECD jointly with the Global Water Partnership-Mediterranean (GWP-Med) in the context of the project labelled by the Union for the Mediterranean (UfM) “Governance and Financing for the Mediterranean Water Sector”, with the support of the FEMIP Trust Fund of the European Investment Bank.

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Executive summary

Jordan has experience in both small- and large-scale private sector participation (PSP) projects, from financing to operation and from greenfield to brownfield. The government is considering involving the private sector in even larger capital projects (in particular the Jordan Red Sea Project). PSP is seen as potentially making an important contribution to the development of Jordan’s water sector, particularly to meet the upfront costs of investment and to transfer technical knowledge. Nevertheless, experience shows that to reap the benefits of PSP, a number of framework conditions need to be in place, in particular in relation to the regulatory framework, administrative capacity, financial sustainability and strategic planning of projects.

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