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Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 3683-JO

STAFF APPRAISAL REPORT

JORDAN

FIFTH POWER PROJECT

April 14, 1982

Projects DepartmentEurope, Middle East and North AfricaRegional Office

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit = Jordan Dinars (JD)

JD 1 = 1,000 fils

JD 0.33 = US1.00

JD 1.00 = US$3.00

WEIGHTS AND MEASURES

1 meter (m) = 3.281 feet (ft)

1 kilometer = 0.621 mile

1 square kilometer (km2) 0.386 square mile (mi2)

1 cubic meter (m 3 ) = 35.315 cubic feet (ft3 )

A1 kilogram (kg) = 2.205 pounds (lb)

1 ton (1,000 kg) = 1.102 short ton (sb ton)

3) 0.984 long ton (lg ton)

I barrel (bbl; 0.159 m3) 42 US gallons (gal)

1 kilowatt (kW) = 1,000 Watts

1 Megawatt (MW) = 1,000 kW

1 kilowatt hour (kWh) = 1,000 Wattbours (Wb)

1 Gigawatt hour (GWh) = 1,000,000 kWh = 1,000 MWh (=1O6 kWh)

1 kilovolt (kV) = 1,000 volts (V)

1 kilovolt ampere = 1,000 volt amperes (I kVA)

1 Megavolt ampere = 1,000 kVA

1 kilocalorie (kcal) = 3.969 British thermal units(4.2 kilojoules)

GLOSSARY OF ABBREVIATIONS

CM - Council of Ministers

IDECO - Irbid District Electricity Company

JAEC - Jordanian Atomic Energy Committee

JEA - Jordan Electricity Autbority

JEPCO - Jordanian Electric Power Company

JFI - Jordan Fertilizer Industries

JPRC - Jordanian Petroleum Refinery Company

J VA - Jordan Valley Authority

LPG - Liquified Petroleum Gas

LRAIC - Long Run Average Incremental Cost

MIT - Ministry of Industry and Trade

NEC - National Energy Committee

NPC - National Planning Council

NRA - Natural Resources Authority

PCR - Preece, Cardew and Rider

RSS - Royal Scientific Society

kce - kilogram of coal equivalent

toe - tons of oil equivalent

p.a. - per annum

,iugr/m3 - micrograms per cubic meter

Financial Year Calendar Year

FOR OFFICIAL USE ONLY

JORDAN

FIFTH POWER PROJECT

Table of Contents

Page No.

1. THE ENERGY AND POWER SECTOR ............................... 1

A. Energy Sector ........................................ IEnergy Resources ...... 1*.. I

Overview .......................................... 1Oil Sbale and Tar Sands ........................ *.. . 1Hydropower .... IOtber Sources of Energy ......................... .. . 1

Sector Organization ............................... . .. 1Historical Trend in the Supply and Consumption

of Energy .... 3Per Capita Consumption of Energy. ... 3Supply of Petroleum Products .............. 4Consumption of Petroleum Products . .............. 4Consumption of Electricity .... 5

Forecast of Supply and Consumption of Energy ......... 5Future Consumption of Petroleum Products .......... 5

Energy Pricing . . ..................... I ............... 5Petroleum Products ........ . . . .. 5

Electricity Pricing . . ............................. 7Bulk Tariffs .... 7Retail Tariffs . . ............................... 7

B. Power Subsector ...................................... 8Beneficiary .......................................... 8Historical Development of the Power Suibsector ........ 9Power System Planning .. 10Development Program .............. 10

Load Forecast .. 10Generation ........................................ 11Transmission Network .. 11Distribution ...................................... 11Rural Electrification .. 11Development Program Costs . . 12

Role of IDA/Bank ..... . . 12

The report was prepared by Messrs. V. Mastilovic (Engineer),C.P. Ranganatban (Financial Analyst), I. Elwan (Economist) andT. 0. Ozkan (Economist)

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be discIDsed without World Bank authorization.

Table of Contents (continued)

Page No.

II. THE PROJECT ............................................. 13

Objectives .. 13Description .. 13Use of Alternative Fuels .. 13

Fuel Supply .. 14Consultants' Services .. 14

Project Cost Estimate .. 15Project Financing Plan .. 17Implementation .. 18Procurement .. 18

Disbursements .. 19Environmental Aspects. 19

Project Risks .. 20

III. FINANCE .20

Accounting .. 20Staffing .. 20Financial Planning .. 21Accounts Receivable .. 21Fuel Price Adjustment .. 21Revenue CVuv+.:ant ...................................... 21

Past Performance and Present Position .22Financing Plan .22Future Financial Performance .24Debt Service Coverage .25Auditing .25Insurance .25

Jordanian Electric Power Company (JEPCO) .25

IV. PROJECT JUSTIFICATION .26

A. Load Forecast .26B. The Least Cost Alternative .26C. Return on Investment .27

V. AGREEMENTS REACHED AND RECOMMENDATIONS . ........ 27

Table of Contents (continued)

ANNEXES

1.1 - Electricity Tariffs in Jordan1.2 - JEA Organization Chart1.3 - Generation, Consumption and Peak Loads1.4 - JEPCO and IDECO - Basic Statistical Data1.5 - Generation Installed Capacities1.6 - Forecast Electric Energy Balances (Total Power System)1.7 - Forecast Balances of Energy and Capacities (Interconnected

System)1.8 - Forecast of Sales by Consumer Categories1.9 - JEA's Development Program Costs2.1 - Description of the Project2.2 - Project Cost Estimate2.3 - Power Station Implementation Scbedule2.4 - Transmission Line Implementation Schedule2.5 - Description of the Civil Works Contract Package2.6 - Estimated Schedule of Disbursements3.1 - Salaries of JEA's Staff During 1975-19813.2 - JEA's Employee Turnover in 1978-19813.3 - Income Statements3.4 - Balance Sbeet3.5 - Sources and Applications of Funds3.6 - Notes and Assumptions for Financial Forecasts4.1 - Load Forecast (1981-1995)4.2 - Return on Investment5.1 - Selected Documents Available in the Project File

mAPS

IBRD 16092IBRD 16093

I. THE ENERGY AND PO'WER SECTOR

A. Energy Sec:or

Energy Resources

1.01 Overview: Jordan's presently known indigenous energy resourcesconsist of relatively large deposits of oil shale, some tar sands, a smallhydro potential, and a few geothermal sources of low surface temperatures. Nocommercially exploitable coal, lignite, oil, or gas are known to exist.Jordan's endowment of noncommercial and renewable energy, with the exceptionof solar energy, is modest.

1.02 Oil Shale and Tar Sands: Several oil shale deposits have beendiscovered in Jordan. The largest deposit is about 1,200 million tons with anoil content of about 115 million tons. As for the other deposits, their sizeand geological characteristics are currently being determined. Recently, tarsands were discovered; however, at this point: in time very little is knownabout this new discovery.

1.03 Hydropower; The hydropower potential. is only about 22 MW (54 GWhp.a.), of which 2 MW (4 GWh p.a.) could be developed at the existing KingTalal Dam on the River Zarqa, and the remaining 20 MW (50 GWh p.a.) would beexploited when the multipurpose Maqarin Dam on the Yarmouk River is built.

1.04 Other Sources of Energy: Geothermal resources are known to exist inthe form of hot springs near the Dead Sea wii:h surface temperatures rangingbetween 450 and 630 centigrade. At present, the information on thegeophysical and geochemical characteristics of these springs is incomplete.There are no immediate plans by the Government to undertake furtherexploratory work to determine whether the geothermal resources could be usedfor power generation. Jordan has a good solar regime averaging annually about3,000 hours of sunshine. The Government is actively promoting the use ofsolar energy for water heating by supporting research studies anddemonstration projects aimed at fostering the domestic production andmarketing of solar water heaters. Other sources of renewable energy such asbiomass and firewood are modest, and their contribution to the overall energyneeds of the rural population is almost insignificant.

Sector Organization

1.05 Several entities are involved in the operation and development ofJordan's energy sector. The development of domestic sources of primary energyis entrusted to the Natural Resources Authority (NRA) and the Jordan ValleyAuthority (JVA). The production and delivery of secondary energy is theresponsibility of the Jordan Petroleum Refinery Company (JPRC), the JordanElectricity Authority (JEA), the Jordanian Electric Power Company (JEPCO), and

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the Irbid District Electricity Company (IDECO). The planning and coordinationof the sector is shared among four bodies; the National Planning Council

(NPC), the Ministry of Industry and Trade (MIT), the Council of Ministers (CM)and the Jordanian National Energy Committee (NEC). Energy research involves

the Royal Scientific Society (RSS), the Universities of Jordan and Yarmouk,and the Jordanian Atomic Energy Committee (JAEC).

1.06 NRA, a Government agency headed by the Prime Minister, is responsiblefor all exploration activities in Jordan. Exploration for oil and gas and theassessment of potential uses of oil shale and tar sands are entrusted to NRA'sdepartments of energy and geology. The energy department undertakes oil

related geological surveys, negotiates concessional contracts for explorationwith foreign companies, and more recently, it has undertaken explorationdrilling for oil. The geology department is entrusted with the explorationfor all minerals other than those relating to oil and gas. JVA, an autonomouspublic enterprise, is responsible for the development of the Jordan Valleyincluding the power components at the multipurpose dams of King Talal andMaqarin, and the electrification of the villages in the Valley. However,recently all responsibilities relating to the supply of electricity in the

Valley have been contracted to JEA.

1.07 JPRC, a private organization with 6% Government ownership, is

responsible for importing and refining oil, and distributing and marketingpetroleum products throughout Jordan. Its supply of crude oil is taken fromthe Trans-Arabian pipeline (Tapline) which was constructed to transport SaudiArabian crude oil across Jordan into Lebanon for export.

1.08 JEA, a Government-owned utility established in 1967, is mainlyresponsible for the regulation of the power subsector. These responsibilitiesinvolve; the formulation of plans for the overall development of the powersubsector; the construction of generation and transmission facilities; thegeneration and transmission of virtually all the publicly suppliedelectricity; and the distribution of electricity in the areas under its

jurisdiction. JEPCO, a company owned by the public (77%), JEA (13%) and themunicipalities (10%), purchases power from JEA and distributes it in an areaof about 2,000 km2 covering the city of Amman and its environs. In 1980

JEPCO accounted for about 80% of total electricity sold in Jordan. IDECO, adistribution utility owned by JEA (46.5%), private investors (11%), and somemunicipalities of the Governorate of Irbid (42.5%), buys power from JEA fordistribution in the city of Irbid and the surrounding areas. IDECO's sales in1980 were about 10% of the electricity sold in Jordan.

1.09 NPC is an autonomous Government agency, created in 1971 to formulate,in collaboration with other agencies, long-term plans for the economicdevelopment of Jordan. Recently, the NPC started paying greater attention tothe energy sector by undertaking several studies to assist the Government informulating plans for the optimal'use, development and pricing of Jordan'senergy resources (para 1.19). The council has filled an existing gap in theinstitutional setting of Jordan's energy sector by taking the incentive in

commissioning and supervising studies relating to the development of energy.However, since the council does not have the mandate to implement therecommendations of these studies, its effectiveness as an energy planningagency is hampered.

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1.10 The department of energy in MIT, created in 1977, is responsible forall energy matters including special studies and coordination of energydevelopment plans. The CM approves all plans relating to the development ofthe economy, including energy, and the poLicies for the pricing of electricityand petroleum products.

1.11 NEC was formed in 1977 to review all issues relating to the supplyand development of energy in Jordan and t'o make recommendations to the CM onenergy policy which are based on technical reports and studies prepared by theenergy department in MIT. NEC is composed of representatives from all theagencies dealing with energy.

1.12 Solar energy research is entrusted to the RSS and the Universities ofJordan and Yarmouk. RSS is at present involved in commercialization ofequipment to use solar energy for meeting the residential demand for hotwater. JAEC advises the Government on the use and development of atomicenergy.

1.13 The main feature of the organizational structure of Jordan's energysector is the duplication of responsibilities among the entities in thesector. Although several entities are prasently responsible for thecoordination of energy planning, to date, Jordan has no long-term plan forenergy that would provide an overall set of consistent national objectives.The five-year plans are essentially an aggregation of the plans formulatedindependently by enterprises and agencies (JEA, JPRC, NRA, etc.). Theresponsibilities for managing, operating and developing the energy sector needdelineation, and the staffing of the entities entrusted with the formulationand implementation of plans requires strengthening. This would involve thestreamlin;-g of the institutional structure of the energy sector and theconcentration of human and financial resources in an institution with adefinite mandate for developing the sector. In recognizing this need, the1981-1985 plan calls for the creation of an energy planning agency. However,before such an agency is created, the Government should undertake a detailedreview to outline its structure, responsibilities, staffing and budgetaryneeds. The review should also identify the laws to be altered to consolidatethe desired responsibilities and expertise in the proposed agency andeliminate the prevailing duplication of responsibilities and manpower. TheGovernment has agreed to review with the Bank, by not later than June 30,1983, a plan for strengthening the planning and management of the energysector and for improving the coordination among the energy-relatedinstitutions in Jordan.

Historical Trend in the Supply and Consumption of Energy

1.14 Per Capita Consumption of Energy; Jordan's per capita consumption ofenergy has increased at an average annual rate of about 5.6% between 1960 and1979; from 197 kce in 1960 to 552 kce in 1979 (average for middle incomecountries about 1,225 kce). In 1980, 64% of Jordan's population had access topublic supply of electricity. The per capita consumption of electricity in1975 was about 202 kWh compared to 482 kWh for 1980. Thus, by 1980 Jordan hadachieved about the same level of per capita consumption of electricity asEgypt had in 1979 or Portugal in 1952. The increase in the consumption of

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electricity has been largely due to the increased demand by industry, anddomestic and small commercial consumers which accounted respectively for 35%and 50% of total sales in 1980.

1.15 Supply of Petroleum Products; Jordan is totally dependent onimported crude oil for its conventional energy requirements. Virtually allthe petroleum products consumed are produced domestically at the JPRC refineryat Zarqa. The refinery started its operations in 1960 with a throughputcapacity of 1,000 t/day crude oil. The capacity has now reached 12,300 t/dayafter three expansions in 1970, 1973 and 1981. Jordan's output of petroleumproducts increased at an average annual rate of about 16% between 1975 and1980 with the mix of products produced remaining relatively unchanged overthat period. In 1980, Jordan imported 1.9 million tons of crude oil and smallquantities of LPG and lubricants amounting to 13,000 tons and 5,000 tonsrespectively. A summary of the energy balance for 1975, 1980, 1985 and 1990is presented in Table 1.

Table 1: Energy Balance('000 toe)

1975 1980 1985 1990

SupplyCrude Oil 870 1,886 2,843 4,080LPG 0 13 - -Lubricants 6 5 10 15

Total Supply 876 1,904 2,853 4,095

DemandLPG 25 56 75 99Gasoline 155 270 367 425Jet Fuel 72 209 245 313Kerosene 118 160 211 263Gas Oil/Diesel 239 509 716 1,051Fuel Oil 184 469 908 1,511Others 59 94 114 139Refinery Losses 24 137 217 294

Total Demand 876 1,904 2,853 4,095

1.16 Consumption of Petroleum Products; The average annual rate of growthin the consumption of petroleum products between 1975 and 1980 was about16.8%, increasing from 876,000 to about 1.9 million tons. Jet fuel had thehighest growth rate (23.8%), followed by fuel oil (20.6%), LPG (17.5%), gas

oil/diesel (16%), gasoline (11.7%), and kerosene (6.3%). These relativelyhigh growth rates were mainly due to the increased demand for petroleumproducts by the power subsector and the transportation sector. In 1980, gasoil/diesel had the highest share (26.7%) of all the petroleum products

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consumed, followed by fuel oil (24.6%), gasoline (14.2%), jet fuel (11.0%) and

LPG (2.9%). In 1980, transportation accounted for about 50% of the totalpetroleum products consumed, industries for 15%, power generation for 17% and

households for 13%, leaving about 5% for all mi;cellaneous consumers.

1.17 Consumption of Electricity; Total con;umption of electricity in

Jor(ian increased at an average annual rate of about 19.8% from 355.5 GWh in1975 to about 877 GWh in 1980. Non-coincident maximum demand increased atabout 17.4% p.a. from 87.8 MW in 1975 to 196 MW in 1980. Over the sameperiod, the most significant change in sales was the increased share of thesales to domestic and small commiercial consumers, which increased from 37% oftotal sales in 1975 to about 50% in 1980. The increased share of the low

voltage consumers is principally attributed to the extension of publicelectricity service to the rural areas, and the overall higher consumption bythe residential consumers stimulated by the increased remittances from the

Gulf after 1973.

Forecast of Supply and Consumption of Energy

1.18 Future Consumption of Petroleum Products: The forecast of the

consumption of petroleum products between 1980-1990 shows a slowdown in the

rate of growth of energy consumption compared to the period 1975-1980.Overall consumption of energy is expected to increase at an average annualrate of about 8.3% between 1980 and 1985 and 7.6% between 1985 and 1990.Growth in demand for fuel oil is projected to remain high (14.1% over1980-1985 and 10.7% over 1985-1990) due mainly to planned commissioning of new

power generation capacities (Aqaba Power Station). Consumption of all otherproducts is expected to grow more slowly than in the past, resulting in anincreased share of fuel oil in total demand from 27% in 1980 to 40% in 1990.(Future consumption of electricity is presented in para. 1.35.)

Energy Pricing

1.19 Petroleum Products: The prices of petroleum products are set by the

Government and revised periodically to reflect higher import costs. TheGovernment taxes motor gasoline, LPG and jet fuel sold to foreign airlines.All other petroleum products are subsidized. The policy of subsidizing theprices of petroleum products used by the transportation, agriculture andindustrial sectors is aimed at dampening the effects of the increasing pricespaid for imported crude oil from being reflected in the general price level.

The subsidy for kerosene, which is used by the residential consumers forlighting, cooking, and water and space heating, stems from the Government's

desire to provide these fuels to the low-income consumers at reasonable prices.

1.20 Since 1973, when crude oil prices first rose significantly, the

burden on the national budget of the net subsidy for petroleum productscontinued to increase because of the Government's reluctance to pass on to the

consumers the increases in the import bill for oil. By 1978, the subsidy forpetroleum products had reached JD 22 million (US$65.0 million). In 1979, the

Government decided to reduce the subsidy by gradually closing the gap betweenthe domestic and border prices. The domestic frices were since increased five

times; in March and July of 1979, February of 1980, and February and November

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of 1981. Since 1979, the imported price of oil has increased by about 150%compared to increases in the prices of petroleum products that amounted to103% for gasoline, 200% for gas oil and 400% for fuel oil. As a result, thenet subsidy for petroleum products in 1981 was about US$66.7 million which inrelative terms is not much higher than the level of the subsidy in 1978.Table 2 below summarizes the domestic and border prices of petroleum productsafter the last increase.

Table 2; Relationship of Domestic and Border Pricesfor Petroleum Products

(November 1981)US$/ton

DomesticPrice

Border Domestic Tax or as % ofProduct Price Price (Subsidy) Border Price

LPG 390 394 4 101Gasoline 367 672 305 183Jet Fuel 336 247 (89) 74Kerosene 320 228 (92) 71Gas Oil/Diesel 306 212 (94) 69Fuel Oil 168 150 (18) 89Weighted Average 287 274 (13) 95

1.21 Ths bS''i for gas oil/diesel accrues mainly to the owners of thecommercial transport vehicles transporting goods and materials withinJordan and from the port of Aqaba to Lebanon, Iraq and Syria. The subsidyfor jet fuel benefits the national airline, while the subsidy for fuel oilaffects the industry and utilities such as JEA, the cement plant, the Zarqarefinery, etc. These subsidies are implicitly passed on to the consumersthrough the relatively lower prices paid for goods and services produced bythe transport, industrial and agriculture sectors. On the other hand, thesubsidy for kerosene accrues explicitly to the consumers who use it fordomestic purposes.

1.22 The subsidies for gas oil/diesel, fuel oil and jet fuel are notjustified on economic grounds. The optimal policy for pricing energyresources would dictate that domestic prices be set at levels that reflecttheir real cost to the economy. The Government is aware of theshortcomings of its present pricing policy, but is concerned that byclosing the gap between the world and domestic prices for the subsidizedpetroleum products, large increases in the general price level would betriggered. Therefore, before eliminating the subsidy for these products,the Government is constructing an input/output model to simulate the impactof higher prices for energy on the various sectors of the economy includingthe prices of intermediate and final products. An energy conservationstudy by foreign consultants is also expected to start shortly with a view

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to determining the industries where investment in more energy efficientequipment and processes would enable these indlstries to absorb the higherprices of energy without significantly altering the prices of theiroutput. In addition, the Government is initiating a third study, whose

terms of reference have been reviewed by the Bank, for optimally planningand organizing the transportation sector (freight transport, air and sea

transport, highway and road network design, et-.). Among the tasksoutlined in the terms of reference for this stidy is the assessment of theimpact of eliminating the subsidies for gas oil/diesel and jet fuel on thefreight road transport subsector and the commercial aviation subsector.The conservation and transportation studies ara expected to be completedwithin two years. As an interim measure, however, and until the

recommendations of the studies are reviewed by the Government and the Bank,an understanding has been reached that the Government will continue itsefforts in closing the gap between world and domestic prices for petroleumproducts.

Electricity Pricing:

1.23 JEA sets its own tariffs for sales to bulk consumers (largeindustries, JEPCO and IDECO) and the low voltage consumers in itsjurisdiction. In the areas served by JEPCO and IDECO, tariffs aredetermined by each utility in consultation with JEA. However, theintroduction of new tariffs by JEA, JEPCO or IDECO require Governmentapproval.

1.24 Bulk Tariffs: The bulk tariffs apply only to JEA's sales to thelarge industrial consumers and the electricity distribution utilities(JEPCO and IDECO). These are based on a time of day structure (peak andoff-peak) with no seasonal variation. They also differentiate betweenconsumers in the district of Irbid and those in the other districts. Thepeak tariff involves a capacity charge of JD 2.41kW for all districts, andan energy charge of 17.5 fils/kWh for Irbid and 18.5 fils/kWh for the otherdistricts. The off-peak tariff involves an erergy charge of 12.5 fils/kWhfor Irbid and 13.5 fils/kWh for the other districts. In January 1982, theaverage economic cost of electricity (based on LRAIC) for bulk sales wasabout 26.2 fils/kWh compared to an average revenue for sales to JEPCO,

IDECO and the large industrial consumers of about 26 fils/kWh.

1.25 Retail Tariffs: The tariff structure for electricity sales to thelow voltage consumers is identical for all three utilities (JEA, IDECO andJEPCO). It is based on a uniform block rate i-or each customer categoryclassified according to the end use of electr:-city (domestic, commercial,small industries, water pumping, etc.). However, the tariff level for eachcategory differs slightly among the three uti.ities (Annex 1.1) to reflecttlhe cost incurred by each in providing electr:city service. In January

1982, the average tariff for sale to the low voltage consumer was about35.6 fils/kWh which was below the average economic cost of supply (based onLRAIC) of about 37.6 fils/kWh.

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1.26 Electricity tariffs were at levels that conveyed to consumers thereal cost of the resources used in meeting their electricity demand(LRAIC). The tariff have been high enough to enable JEA to cover its costsand provide 25% internal contribution towards the cost of its developmentprogram between 1977 and 1980. However, following the increases in thedomestic prices of petroleum products, JEA's level of internal cashgeneration deteriorated because of the Government's reluctance to allow theutility to fully recover the increases in its fuel bill from the consumersof electricity (para. 3.05). In order for JEA to maintain its internalcash generation at the level agreed with the Bank, increases in the averagetariff level of 20% for 1983 and 13% in 1984 would be necessary(para. 3.12).

1.27 The uniform block rates for the low voltage consumers areinconsistent with the Government's policy of encouraging conservation andrestraining the growth of demand for energy. There are indications thatthe low voltage consumers' demand for electricity is relatively insensitiveto increasing tariffs primarily because the remittances from the Gulf andSaudi Arabia which accrue principally to the households rather than theGovernment. 1/ As a result, the household's demand for electricity isdetermined by levels of disposable income that are higher than wouldotherwise prevail. Therefore, by maintaining uniform block rates for salesto the low voltage consumers, the Government is foregoing revenues whichthe utilities could mobilize to finance their development program. Inaddition, by introducing increasing block rates in the structure ofelectricity tariffs, large domestic and small commercial consumers could beinduced to conserve in their use of electricity. The Government and JEAhave agreed to complete, by December 31, 1982, an assessment of the effectson the resources mobilized by the power subsector of introducing increasingblock rates in the tariff structure '- electricity sales to thelow-voltage consumers, to review with the Bank, by December 31, 1982, therecommendations emanating from that assessment, and to implement tariffsand other measures thus determined.

B. Power Subsector

Beneficiary

1.28 The General Electricity Law provides that JEA should be bothfinancially and administratively independent. JEA has a board of eightdirectors appointed by the Government, with the Minister of Industry andTrade as the Chairman of the Board. JEA is well organized and properlymanaged and has already proven its competence in carrying out itsresponsibilities. Its present organization structure is based on the

1/ After increasing the tariffs by about 50% in 1980, the householdconsumption of electricity dropped for two months and then resumed itshistorically high rate of growth.

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recommendations of the management consultants appointed under Credit386-JO. Details of the organization are shown in Annex 1.2(Chart WB 22339). All managerial staff have a university education andseveral years of experience in power operations3 in Jordan and abroad.

1.29 The Authority has a total staff of 1,387 (September 1981) of which115 are graduate engineers and 808 are other t'echnical staff . AlthoughJEiA's salaries for the technical staff are appropriate for Jordaniancircumstances, the salaries of the financial aid administrative staff needto be reviewed (see para. 3.02). There is a continuous movement ofqualified technical staff to the Gulf countries, where salaries are muchhigher, but the majority of the staff return tD Jordan after two-threeyears abroad to join JEA or JEPCO, the major employers of the technicalstaff with power utility experience. JEA pays due attention to thetraining of its staff. Under the Third Power Project (Loan 1688-JO) JEAprepared a detailed and satisfactory staff training program covering allits training needs. This program, to be implemented by end-1983, willenable JEA to improve its technical, financial and administrative services.

Historical Development of the Power Subsector

1.30 National power subsector statistical data for 1971-1980 anddetails of JEPCO and IDECO data are shown in Annexes 1.3 and 1.4. From1971 to 1980 total generation (including imports) increased from 230.4 GWhto 1,070 GWh, while electricity consumption rose from 204 GWh to 877 GWh(trend growth rate 19% p.a.). Electricity sales in 1980 are summarizedbelow by customer categories and administrative districts:

Customer Category Administrative Districts% Total An7man Irbid Karak Ma'an & Aqaba

- _---------------------GWh-------------------

Domestic 35 306 240 8 48 10Industrial 36 321 270 31 9 11Commercial 12 107 88 9 1 9Water Pumping 8 76 51 18 1 6Hospitals and Charities 5 40 32 6 1 1Street Lighting 1/ 2 16 10 3 1 2Broadcasting and TV 1 7 6 1 0 0Others 1 4 - 1 0 3

Total 100 877 697 77 61 42

1/ Street lighting was provided free of charge at the Government's request.

1.31 Industrial consumption has been increasing rapidly in the lastseveral years. The Government is trying to accelerate the development of therelatively undeveloped Central and Southern regions of Jordan by locatingfuture industrial projects there and by electrifying towns and villages. Thetotal electricity losses are around 17% of generation because of stillunderdeveloped transmission and distribution networks and small inefficientgenerating units.

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1.32 The public power system comprises at present three 33-MW steam units,seven gas turbines and about twenty small diesel generating sets (details inAnnex 1.5). The national transmission network comprises 176 km oftransmission lines and eight transformer substations witb an installedcapacity of 550 MVA. Operation and maintenance of power plants and of thenetwork are satisfactory. JEA is responsible for power distribution in Aqaba,Ma'an, Karak and part of the Jordan Valley and its distribution networkconsists of 640 km of overhead lines and cables.

1.33 Only 138 of Jordan's 982 villages bave been electrified so far byJEA, JEPCO and IDECO with funding from Government, foreign borrowings and theRural Electrification Fund established by the Government in 1980 for thispurpose. About 50% of the rural population has access to the public powersupply. The rural networks are well designed and constructed, and theiroperation and maintenance are satisfactory. Villagers pay for services andfor electricity consumed by them.

Power System Planning

1.34 Power system planning in Jordan is, generally, satisfactory. Theload forecasts and investment programs are prepared by JEA's planningdepartment with the help of consultants. JEA still depends largely onexternal consultants' services for its power system planning and analyses.Under the Fourth Power Project (June 1981), JEA has agreed to take appropriateactions to strengthen its planning department to further develop powersubsector planning capabilities and inform the Bank of the proposed actions.

Development Program

1.35 Load Forecast; The national load forecast for 1981-1990 (Annex 1.6)shows total electricity generation increasing from 1,064 GWh in 1981 to2,881 GWh in 1987 and 3,812 GWh in 1990, with a growth rate of 12% p.a. Thepower system is expected to be fully interconnected in 1984. The bigh rate ofload growth is mainly due to a rapid increase expected in JEA's direct salesto large industries and otber consumers. Details of the interconnectedsystem's development are given in Annex 1.7. The maximum demand wouldincrease from 194 MW in 1981 to 574 MW in 1987 and 736 MW in 1990, and theavailable generation capacity from 310 MW in 1981 to 697 MW in 1987 and1,184 MW in 1990. Except in 1985 when the available capacity margin drops tozero because of no addition of capacity in that year, the capacity margin isreasonable. The system's load factor is expected to remain unchanged at about57%. The forecast of sales by consumer categories is given in Annex 1.8. Thesale to large industries will increase from 12% of total JEA sales in 1981 to30% in 1987 on account of the establishment of several large industries inCentral and Southern Jordan. The load forecast assumes a per capitaconsumption of some 1,010 kWb in 1987. The forecast is reasonable in relationto Jordan's present stage of development and its general economic prospects.However, some of the new projected industrial loads (Annex 1.8) may be delayedand deviations in respect of other consumers are also possible. Theseuncertainties are reasonably covered in the load forecast, which includes inaddition to the most probable forecast, botb low and higb forecasts.

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1.36 Generation: The Hussein steam power station near Amman is beingextended by three 66-MW units to be in commercial operation in 1982. When thefourth 66-MW unit is commissioned in 1984, the final extension of this stationwould be completed. The proposed Project with two 130-MW steam units would bebrought into service in 1986.

1.37 Transmission Network: About 300 km of transmission lines and 284 MVAin substation transformer capacities are unde: construction for completion by1982. During 1983-87, about 500 km of transmission lines and substations with

a capacity of 699 MVA are planned to be const:ucted. The 132-kV transmissionline from Ma'an to Aqaba will complete the transmission link between theNorthern, Central and Southern regions to enable integrated operation of thepower system in Jordan. The Jordanian and Sy:ian power systems are connectedthrough a 66-kV transmission line and Jordan has been importing electricityfrom Syria. A 230-kV line from Irbid to Damascus with a 100-MVA transformersubstation at Irbid has been constructed, whi-h would enable synchronousoperation of the two power systems. This interconnection would enable betterutilization of power system generating facilities in both countries throughcoordinated operation and maintenance, and also improve reliability of powersupply by giving the Jordanian system access to the much larger generationreserve of the Syrian power system. Reserve sharing would allow JEA to reduceits generating capacity by about 50 MW. However, the interconnection has notbeen brought into operation due to the current political situation. There areno immediate plans for other interconnections between the Jordanian powersystem and the neighboring systems.

1.38 Distribution; JEA's distribution network expansion, to beimplemented in the period 1981-87, includes about 1,497 km of overhead linesand 165 MVA in substation transformer capacity. In the same period, JEPCOplans to construct 24 transformer substations with an installed capacity of121 MVA and to install 74 km of cables and 36 km of overhead lines as well asto reinforce the existing 33-kV network by adling 130 MVA in power transformercapacity, 25.5 km of 33-kV cables and 9 km of 33-kV overhead lines. JEPCOwill also build about 350 new distribution substations in its concessionarea. Furthermore, JEPCO has started reinforcing the Amman urban distributionsystem by changing from 6.6 kV to 11 kV. Similarly, IDECO is also reinforcingthe distribution network in the city of Irbid. The distribution networks inJordan are designed by experienced foreign consultants and follow the Westernpattern and standards.

1.39 Rural Electrification: JEA has prepared a national plan forelectrifying all villages except 100 small and isolated settlements (882 ofthe total 982) in 1981-1993. At present, 284 villages with a total populationof 290,000 are being electrified, and when the work is completed, 422 villageswould be electrified or about 43% of the total number of villages having 91%of the total rural population in Jordan. The remaining villages would beelectrified in three stages;

Stage Number of Villages Period& Housing Schemes

1 140 1984-19862 160 1987-19903 160 1991-1993

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With the completion of the third stage, almost all the rural population inJordan would have access to the public power supply. The Government playsa very active role in rural electrification and assists in its financing byarranging foreign loans. The Governments of Denmark, the UK, the USA andthe USSR have provided financial assistance for rural electrification inJordan. The Government has relent the foreign loans to JEPCO and IDECOthrough JEA.

1.40 Development Program Costs: JEA's total investment in 1982-1987,excluding interest during construction, is estimated to be about JD 180million (US$540 million) at late-1981 prices (Annex 1.9). The investmentprogram is reasonable in relation to the forecast demand to be met. In thepast, JEA had no major problems in securing financing for its investmentprograms mainly from Government contributions and foreign borrowings. Itis expected that JEA would be able to finance internally about 48% of itsinvestment program. JEPCO's total investment program in 1982-1987 isestimated to cost about JD 40 million (US$120 million), of which about 40%is expected to be financed by internal cash generation, issue of shares andcustomers' contributions. The Government has secured loans for JEPCO fromthe European Investment Bank (JD 1.7 million), the USA (JD 2.7 million) andthe USSR (JD 1.06 million). Other foreign borrowings and local loans,including Bank Loan 1986-JO, would complete the financing plan for JEPCO'scapital investment. IDECO's development program in 1982-1987 is estimatedto cost about JD 10 million (US$30 million). Its complete financing hasbeen arranged through self-financing and shares (33%), Government loans(22%), and loans from the UK (JD 2.3 million) and the USSR(JD 2.4 million). The Government regularly reviews the investmentrequirements for the construction programs of power utilities and arrangesto secure the necessary financing from external and internal sources.

Role of IDA/Bank

1.41 The World Bank Group has made two credits and two loans to theGovernment of Jordan for power development. IDA Credit 386-JO (1973) forUS$10.2 million together with an equal amount from the Kuwait Fund was usedto finance two 33-MW steam power units and one 13-MW gas turbine at theHussein power station. The power facilities have been completed and areoperating satisfactorily. IDA Credit 570-JO (1975) for US$5 million withco-financing from the Arab Fund (US$13.4 million) was used to finance athird 33-MW unit at the Hussein power station, reconditioning of the Marqadiesel power station, and the Southern Jordan Power Development Study. Thethird unit has been put into commercial operation and Marqa diesel stationreconditioned to reach 40-MW output. The combined project completionreport for the two credits (June 1981) states that the projects, infulfilling their roles, have exceeded the appraisal expectations and thatthe Bank needs to maintain its focus on JEA's autonomy and ability toretain competent professional staff. Loan 1688-JO of 1979 (US$15 million)is being used to finance the transmission network and ruralelectrification. This Project is nearing completion. Loan 1986-JO (US$25million) was made in June 1981 for the Fourth Power Project comprisingparts of the network development programs of JEA and JEPCO to beimplemented in the period 1981-1984. This Project is progressing

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satisfactorily. The Bank Group lending operations have been instrumentalin establishing JEA and in creating a modern power system in Jordan. Theseoperations have also played a catalytic role in attracting investments inthe power subsector by both Kuwait and Arab funds. The proposed fifth loanwould enable the Bank to continue and expand its efforts towards achievingthe institution-building objectives identified under the previous loans.JEA needs to further improve its planning capabilities and strengthen itsstaff training programs.

1.42 The Bank has assisted JEA and the Government in preparing theProject in a manner that is financially and economically viable and wouldattract financing from other institutions. Furthermore, the proposedProject would enable the Bank to assist Jordan in connection with theoverall structural changes and improvements in the country's energy sector,particularly in energy planning, demand management, fuel pricing policies,strategy for development of indigenous energy resources andinstitution-building aspects of the energy sector.

II. THE PROJECT

objectives

2.01 The primary objective of the physical facilities of the Project isto meet the future power demand at least cost to the economy. TheProject's further objectives are; the improvement of the quality of powersupply services; the acceleration of the country's regionalelectrification; the continuation of the institution-building efforts todevelop JEA as a financially viable and technically efficient entity; andthe strengthening of energy sector planning ard coordination activities.

Description

2.02 The Project is a part of JEA's power system development programfor 1982-1986 and has the following components (details in Annex 2.1):

(i) a seawater cooled steam power statior, at Aqaba with its firststage to be commissioned in 1986 consisting of two 130-MWoil-fueled generating units and accessories;

(ii) a 400-kV transmission line from Aqaba to Amman, about 320 km long,to be initially operated at 132 kV; and

(iii) consultant's services.

The Project is expected to be completed by December 31, 1986.

use of Alternative Fuels

2.03 The consultants (para. 2.06) have paid particular attention to theselection of fuel(s) for all proposed stages cf the power station expansionto an ultimate capacity of about 1,540 MW in two further stages of 640 MW

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each and have recommended using heavy distillate fuel oil (a by-product ofdiesel and gasoline production at the Zarqa refinery) for the initialinstallation for reasons of availability and cost (although priced atinternational levels for economic analyses). Development of the

infrastructure needed for an alternative coal supply was thoroughlyconsidered, together with its attendant problems of long term contracts

with remote suppliers, of unloading, storage and handling of coal, ash andscrubber sludge disposal, and pollution abatement requirements to protectthe waters and air quality in the area. The consultants have also studieddual-fired generating units (both heavy fuel oil and coal capable) in thefirst stage and possible future conversion to the use of coal. Their studydid not show economic advantages for these alternative solutions over the

heavy fuel oil fired units. However, the overall layout of the powerstation is so designed as to enable the use of other fuels, particularlycoal, in the subsequent stages of expansion, if found appropriate.

Fuel Supply

2.04 Two fuel oil storage tanks would be constructed at the power

station to permit 60 days' continuous operation of the station at a 75%capacity factor. The fuel oil would be delivered to the site via off-takefrom a pipeline to be built between the Zarqa refinery and Aqaba. Thispipeline would be used for transferring refinery products to industrialconsumers in Central and Southern Jordan, and imported crude oil from Aqababack to the refinery. The power station would be the largest fuel oilconsumer to be supplied by the pipeline, both in the Aqaba area and alongthe pipeline route. The pipeline feasibility study prepared byWilliams Bros. of the UK has been approved by the Government. Although nota paz-_ of the Project, the pipeline needs to be brought into operationbefore the power station is commissioned. The Government has agreed tocomplete the pipeline between Zarqa and Aqaba not later than March 31, 1986.

2.05 JEA has started discussion with the Aqaba port authorities for thepossible utilization of fuel oil unloading facilities at their wharf forunloading of heavy fuel oil by ocean-going tankers, as a stand-by fuelsupply arrangement in case of disruption of the supply through theZarqa-Aqaba pipeline. JEA has agreed to make, by December 31, 1983,arrangements with the Government agency operating the Aqaba industrial portfacilities for the utilization of these facilities for the stand-by fueloil supply to the Aqaba power station.

Consultants' Services

2.06 JEA appointed Chas T. Main (USA) as consultants to prepare thefeasibility study and detailed designs of the Aqaba power station. JEA hasalso participated actively in the preparation of the study and designs.The document entitled "Aqaba Thermal Power Station (Feasibility Study andDesign Memorandum), Stage 1" demonstrates the Project's feasibility and itseconomic justification. The study covers in detail the selection ofstation fuel, unit sizes, steam systems and other major parameters toensure the most economic and reliable choices.

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2.07 JEA has also appointed Preece, Cardew and Rider (PCR) of the UK asconsultants for the 400-kV Aqaba-Amman trarismission line. PCR hasrecommended that JEA construct a 400-kV double circuit line (4 x 200mm2)between Aqaba and Amman for completion in 1986 but to be operated initiallyat 132 kV and to be upgraded to its rated voltage with the commissioning ofa third generating unit.

2.08 The consultants have prepared the basic design documents and havestarted preparing the Project's bidding documents, which are planned to becompleted in early 1982. The consultants have also been actively involvedin all discussions with potential Project financiers. JEA needsconsultants' assistance in Project design, procurement, supervision of

construction and erection, inspection of works and equipment, and theinitial operation of the Project facilities. JEA has agreed to continue toemploy consultants, with qualifications, experience and conditions ofemployment satisfactory to the Bank, for engineering services, procurement,supervision of erection and initial operation of the Project.

Project Cost Estimate

2.09 The estimated cost of the Project, excluding interest duringconstruction, is JD 108.1 million (US$324.2 million equivalent), of whichJD 85.9 million (US$257.7 million) would be in foreign exchange based onthe exchange rate of JD 1 = US$3. Annex 2.2 shows in detail the estimatedcosts of the Project, which are summarized as follows;

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Local Foreign Total Local Foreign Total-------JD Million ------ -------US$ Million…

Aqaba Power Station,2x130 MW

-- Site Investigation &Marine Survey 0.048 0.069 0.117 0.144 0.207 0.351

--Civil Works 5.514 12.512 18.026 16.542 37.536 54.078--Boiler Island 2.184 20.670 22.854 6.552 62.010 68.562--Turbo/Generator Island 1.276 17.598 18.874 3.828 52.794 56.622--Switchyard Island 0.262 2.189 2.451 0.786 6.567 7.353--Housing 0.933 - 0.933 2.799 - 2.799

Total 10.217 53.038 63.255 30.651 159.114 189.765

TransmissionLine

--Conductors - 4.183 4.183 - 12.549 12.549--Insulators - 1.675 1.675 - 5.025 5.025

--Towers, Fittings &Erection 5.943 3.688 9.631 17.829 11.064 28.893

Total 5.943 9.546 15.489 17.829 28.638 46.467

EngineeringServicesPower Station 0.641 1.949 2.590 1.923 5.847 7.770Transmission Line 0.308 0.459 0.767 0.924 1.377 2.301

Total 0.949 2.408 3.357 2.847 7.224 10.071

Total Base Cost 17.109 64.992 82.101 51.327 194.976 246.303

Physical ContingenciesPower Station 0.742 4.245 4.987 2.226 12.735 14.961Transmission Line 0.312 0.504 0.816 0.936 1.512 2.448

Total 1.054 4.749 5.803 3.162 14.247 17.409

Price ContingenciesPower Station 2.354 13.982 16.336 7.062 41.946 49.008Transmission Line 1.670 2.172 3.842 5.010 6.516 11.526

Total 4.024 16.154 20.178 12.072 48.462 60.534

Total Project Cost 22.187 85.895 108.082 66.561 257.685 324.246

2.10 The base cost estimates are expressed in anticipated early-1982prices. These estimates were developed by the consultants on the basis ofcurrent world and local prices and particularly the cost of the recentlysigned contracts for similar works and equipment in Jordan and nearbycountries. The costs were reviewed by Bank staff and found appropriate. Theforeign costs quoted represent the total foreign exchange cost of works andgoods purchased both from abroad and locally and exclude import duties andtaxes since JEA is exempt from such duties and taxes. Physical contingencieshave been estimated at about 8% for civil works and 5% for equipment andmaterials. These allowances are reasonable, considering the nature of theProject and the advanced stage of its preparation. Price contingencies have

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been calculated at the annual rates of 8.75% in 1982, 7.75% during 1983-85 and

6.50% in 1986, for both foreign and local costs, which are consideredreasonable for Jordan taking into account past and expected price increases

for goods and services. While a lump-sum contract has been agreed for thepower station engineering services, the contract for the transmission lineengineering services includes both physical and price contingencies. Intotal, about 930 manmonths of consultants' services are required at anestimated cost of US$11,500 per manmonth, including all expenses.

Project Financing Plan

2.11 A Project financing plan is given below:

Local Foreign Total----------- US$ Million-----------

A. Project Costs(i) JEA's Cash Generation 66.6 15.3 /1 81.9

(ii) Kuwait Fund - 36.0 36.0(iii) Saudi Fund - 30.0 30.0

(iv) Iraqi Fund - 10.0 10.0(v) Arab Fund - 18.0 18.0

(vi) Islamic Bank - 11.0 11.0(vii) OPEC Fund - 10.0 10.0

(viii) Proposed Bank Loan - 35.0 35.0(ix) Export Development and

Suppliers' Credits - 92.4 92.4

Total 66.6 257.7 324.3

B. Interest During ConstructionJEA - 25.4 /1 25.4

Grand Total 66.6 283.1 349.7

/1 JEA would provide funds in local currency and the Government wouldallocate the equivalent foreign currencies.

2.12 Project financing arrangements are well advanced. NPC has contactedseveral international financing institutions to participate in Projectfinancing. At NPC's invitation, representatives of the Arab, Kuwait, Saudi,OPEC and Iraqi funds, Islamic Bank, Kreditanstalt fUr Wiederaufbau (Germany),the World Bank and the French, Italian, British and Japanese Governments heldtwo meetings in 1981 (the second meeting ia December), to review the Projectpreparations and discuss its financing. A3out US$115 million financing isexpected from Arab sources and the OPEC Fund, of which US$64 million has beenalready committed (Kuwait, Iraqi and Arab funds). The French, Italian,

British and German Governments have offered, in total, about US$80 million forthe Project financing in the form of export development and suppliers'credits.

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2.13 The proposed Bank loan of US$35 million would be made to theGovernment, which coordinates all foreign financing for public sector projectsthrough NPC, for a term of 17 years, including 4 years' grace period. Under aseparate subsidiary loan agreement, the Government would onlend the Bank loanto JEA for a term of 17 years with 5 years' grace, which corresponds to theProject construction period, and cover all Project cost overruns. JEA wouldbear the foreign exchange risk on the loan. The signing of loan agreementswith the co-financiers in the amount of at least US$85 million and finalcommitments, in a form satisfactory to the Bank, for not less thanUS$30 million (para. 2.12), and the execution of the subsidiary loan agreementshall be conditions of loan effectiveness.

Implementation

2.14 JEA would be responsible for implementing the Project by contractsand would use consultants' services to handle the engineering, supervision,quality control, and inspection and testing of works and equipment. JEA'sgeneration and transmission departments are properly staffed and areexperienced in this kind of work as evident from the implementation ofprevious Bank projects. The Project would be implemented during 1982-1986according to the implementation schedules given in Annexes 2.3 and 2.4. Thesite for the power station has been acquired and no specific problems areexpected in obtaining rights-of-way for the Project's transmission line.Necessary preparations for Project implementation are already in hand.

Procurement

2.15 Procurement for works and goods to be financed by the proposed Bankloan (other than consultants' services) would be through internationalcompetititve bidding in accordance with the Bank Group Guidelines forProcurement. Bidding documents for equipment and works are being prepared bythe consultants. JEA has grouped its procurement into the following contractsto ensure effective international competition (for details, see Annexes 2.2and 2.5):

Contract Amount (US$ Million)(a) Power Station Local Foreign Total

(i) Civil Works 21.98 50.26 72.24(ii) Boiler Island 1/ 8.77 83.04 91.81(iii) Turbine/Generator Island 5.18 71.48 76.66(iv) Switchyard Island 1.05 8.78 9.83

(b) Transmission Line

(i) Conductors - 15.89 15.89(ii) Insulators - 6.36 6.36(iii) Towers, Fittings & Erection 23.48 14.05 37.53

1/ Separate bidding will be allowed for fuel oil tanks (contract amountUS$7.4 million) included in this contract package.

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International competitive bids for boiler, turbine/generator and switchyardislands have been invited. Local participation is expected only inconstruction and erection works.

Disbursements

2.16 The proceeds of the proposed loan would be disbursed to cover 50% of

the total costs of the civil works contract. The expected disbursementschedule (Annex 2.6) is based on the Project implementation schedule. Ingeneral it follows the standard disbursement profile for Jordan. The loanclosing date would be December 31, 1987 to allow for payment of retentionmoney.

Environmental Aspects

2.17 The power station site is located in a wadi about 20 km south of

Aqaba, the nearest populated center. The wadi, which is bounded by ruggedsandstone mountains, is almost totally devoid of vegetation. The impact ofpollutants from the power station (stack ertissions, discharge of residuals,thermal change in circulating water discharge to the Gulf of Aqaba and stationliquid wastes) on the environment has been carefully considered by theconsultants using the US Environmental Pro:ection Agency's Air Quality andEmission Limitation Standards as a guide and assuming the use of heavy fueloil with an ash content of 0.01 to 0.1% andl a sulfur content of 3.7 to 4%.One common chimney, 125 m high, would be p-ovided with two flues dischargingstack emissions into the atmosphere from the two boilers included in theinitial 260-MW installation. Peak ground Level concentrations of the stationemissions, both dust and sulfur dioxide, were determined, along with thecontributions of the adjoining fertilizer plant, for cases with and withoutemission controls. It has been found that even without emission controls, themaximum 24-hour concentrations of dust and sulfur dioxide in sensitive impactareas, such as Project's housing areas and tourist beaches, would be up to8jigr/m3 of the dust content (particulate matter) and 116pugr/m3 for sulfurdioxide emissions. Therefore, the units in the 260-MW installation would notutilize emission control equipment of any type. To reduce the amount ofchlorine residuals for controlling biofouling in the circulating water system,a mechanical device has been included in the design of the condenser. Theeffect of thermal impact on the coral reef in the Gulf of Aqaba has also beenthoroughly investigated by the consultants and it has been found that aseawater temperature of 290C was allowable for the protection of theparticular coral reef in the Gulf. In view of the above, the power station isnot expected to cause any significant environmental problems. Necessarytrained personnel and equipment will be available at the power station toobserve and analyze all key pollutants, particularly the stack emissions andthe thermal impact on the marine life.

2.18 The Aqaba-Amman transmission line, which will cross desert andmountainous areas with few permanent inhabitants and little agriculturalactivity, will have no adverse effects on the environment. JEA is payingappropriate attention to the aesthetic appearance of transmission facilitiesand their compatibility with the environment. Possible adverse visual impact

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will be reduced to a minimum by the careful selection of types of transmissionline towers, including an aesthetic tower design near the cities of Amman andAqaba, and by suitable routing of the transmission line.

Project Risks

2.19 No special project risks are expected. Geological soilinvestigations of the station site for load bearing structures on land and onthe offshore reef for the intake and discharge structure have shownsatisfactory results. No significant seismic and other related problems areevident at the site. Based on historical records as well as the knowngeological faulting in the Aqaba region, the power station structures aredesigned for Zone 2 earthquake loading as defined in the USA's UniformBuilding Code.

III. FINANCE

Accounting

3.01 As required under Loan 1688-JO, JEA has implemented the accountingsystem recommended by Peat, Marwick, Mitchell & Co., the consultants appointedunder the first IDA Credit of 1973. It has computerized its accounting workand now prepares monthly profit and loss accounts, usually within 15 daysafter the end of the month. The accounting department is equipped to handlebookkeeping and other routine work, but not more sophisticated work such aspreparation of management reports. The existing staff need further training;also, additional qualified accounting staff need to be recruited. With theassistance of an accounting specialist provided by the Overseas DevelopmentAssociation of the UK for one year to train JEA's accounting staff and toimprove JEPCO's and IDECO's accounting systems, JEA is now revising the formatof the monthly report to the management to include comparison of actuals withbudget, cash flow and balance sheets.

Staffing

3.02 Only about 10% of JEA's accounting staff are experienced accountants,and most of them are working as section chiefs. Clerical staff have generallyonly on-the-job training in JEA. JEA has not been able to significantlyimprove the quality of the financial and accounting staff because of: (i)dearth of qualified accountants/financial analysts in Jordan; and (ii)inadequate salaries paid to such staff (see Annex 3.1 for a comparison ofsalaries of engineers and accountants). During 1978-81, the average annualturnover was 17.8% for accounting staff as against 10.3% for engineers(Annex 3.2). Although JEA has been able to fill up the vacancies in theaccounting department, it has not been able to replace the qualified andexperienced accountants departing for the Gulf States with equally qualifiedpeople. JEA has agreed to take appropriate remedial measures not later thanMarch 31, 1983, to strengthen its financial and accounting department.

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Finiancial Planning

3.03 JEA's financial planning is the responsibility of the planningdepartment wbich does not include any qualified accountants/financialanalysts. Furtbermore, the planning activities are not adequately coordinatedbetween the financial and planning departments. JEA needs to strengthen itsplanning department by adding to its planning staff at least one qualified

accountant/financial analyst with experience in long term financial planning.JEA has agreed to take, not later than December 31, 1982, appropriate measuresto improve its financial planning activities.

Accounts Receivable

3.04 JEA's billing work is centralized except for some remote rural areas

where it is done locally. Its accounts receivable for electricity supply atthe end of 1980 came to about 7 weeks' billings; JEA expects to reduce it toabout 6 weeks, which is acceptable. JEA has adequate legal remedies to dealwitb defaulting customers including distribution entities, since the lawpermits JEA to discontinue the supply of electricity to any defaultingconsumer, or to revoke the license of a distribution entity which is in breachof its charter or of the law.

Fuel Price Adjustment

3.05 The Government introduced revised tariffs from February 6, 1980,including an automatic fuel adjustment clause. Nevertheless, in view of thealready higb tariff level, the Government decided not to let JEA pass on tothe consumers the 50% fuel price increase of Eebruary 1981 and the further 11%price increase of November 1981 but has provided JEA JD 3.1 million topartially offset its additional expenses in 1981 from these price increases.The Government has agreed to take all action required to enable JEA toincrease its electricity tariffs to reflect future increases in its fuelcost. This would ensure that electricity tariffs are maintained at levelsthat convey to consumers the proper signals about the economic cost of theresources used in meeting their demand and enable JEA to adjust its tariffsautomatically under the Government guidelines.

Revenue Covenant

3.06 The first two Credits (1973 and 1975) and Loan 1688-JO of 1979required JEA to earn a minimum 9% return on rEvalued assets. The Bank,bowever, agreed under Loan 1986-JO to the borrower's request to substitute forthe rate of return covenant a cash generation covenant having substantiallythe same objective of adequate cost recovery and reasonable self-financing offuture investments. The new covenant requires JEA to achieve cash generationlevels of at least 25% in 1981, 1982 and 1983 and 35% in 1984 and thereafter,

computed on the average of the construction expenditures for the year inquestion and the next preceding year. Also, the Government and JEA wouldreview at least three months before the end of eacb fiscal year the adequacyof JEA's revenues to achieve, on the basis of a realistic forecast, the agreedcash generation level for the following fiscal year. Based on this review,

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the Government and JEA would determine the measures required to achieve theagreed cash generation level, and consult with the Bank on these measures andon the implementation schedule for the measures before the beginning of thefollowing fiscal year. The existing revenue covenant would be repeated in the

proposed loan. In addition JEA has agreed that after completion of the studyrelating to the introduction of block rates, it will review with the Bank byDecember 31, 1982, the tariff and other measures required for JEA to meet itsfinancial objectives (para. 1.27). Furthermore, the Government has agreed toensure that at all times JEA will be charged the domestic prices of fuel oil.Until sucb time as the Government takes a decision on JEA's request for arevision of tariffs to absorb the 1981 fuel price increases, it willcompensate JEA for the free street lighting and for the supplies to ruralconsumers at less than JEA's economic cost of power provided under theexisting tariff structure.

Past Performance and Present Position

3.07 JEA's actual income statements, balance sheets, and funds statementsfor the years 1978 through 1980, and the estimates for 1981 are given inAnnexes 3.3 through 3.5. JEA's net fixed assets have grown from a mere threequarter million JD in 1975 to about JD 54 million in 1981. JEA has alsoimproved in efficiency of operation as evident from the improvement in theratio of kWh generated/employee from 420,000 in 1977 to 770,000 in 1981. Itachieved rates of return of 4.4% in 1978, 4.6% in 1979, 9.7% in 1980 and 8.6%in 1981 on unrevalued assets. Internal cash generation during 1978-1980averaged 27% of the construction requirements, which is satisfactory.l/

3.08 In 1981, JEA's net internal cash generation excluding thecomperasation for fuel price increases provided by the Government (para. 3.05)was only 14.3% of the average construction requirements as against therequired 25%. However, with the JD 3.1 million compensation provided by theGovernment to cover about 55% of JEA's additional expenses due to the two fuelprice increases in 1981 JEA's self-financing level was 27%.

3.09 JEA's financial condition has been satisfactory. Its debt/equityratio of 44/56 for 1978, 41/59 for 1979 and 1980, and 49/51 for 1981 reflectsa good equity base. Its debt service coverage ratio has been 2.2 in 1978, 2.1in 1979 and 2.6 in 1980 and 2.7 in 1981. The current ratio has been 2.0 in1978, 3.7 in 1979, 3.9 in 1980 and 3.4 in 1981 reflecting a comfortableliquidity position.

Financing Plan

3.10 The forecast sources and applications of funds statements of JEA forthe period 1982-1987, assuming necessary tariff increases to enable JEA toreach the agreed levels of cash generation are given in Annex 3.5. Asummarized version is given below;

1/ Although in 1977 through 1979 JEA did not meet the 9% rate of return ascovenanted under the Third Power Project Agreement (1688-JO of 1979), itsnet internal cash generation during this period was about 25% of theconstruction requirements. The Bank, therefore, accepted JE^A's financialperformance as meeting the intent of the covenant.

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JEA's Financing Plan for 1982-1987% of

JD USt CapitalThousands Thousands Expenditure

Program RequirementsThe Project 1.08,082 324,246 54Other Construction Requirentents /1 72,335 217,005 36Interest During Constructi'in (IDCT 13,898 41,694 7

Total Construction Requ-.rements 1.94,315 582,945 97Disbursements of Relent Lo.ns 5,706 17,118 3

Total Program Requirements 200,021 600,063 100

Sources of FundsInternal Sources:Internal Cash Generation /2 ].38,144 414,432 69Less: Debt Service (Excluding IDC)

for Direct Loans (44,704) (134,112) (22): Debt Service for Relent Loans (7,524) (22,572) (4)

Increase in Working Capital (14,455) (43,365) (7)Rural Electrification Fund /3 10,589 31,767 5Customer Contributions 5,235 15,705 3Amortization of Relent Loan 6,543 19,629 3Net Internally Generated Funds 93,828 281,484 47

Equity 2,300 6,900 1

BorrowingsCommitted Loans:Existing Bank Loans 1688 & 1986-JO 2,961 8,883 1Other Loans for JEA's Projects 6,998 20,994 4Foreign Loans to be Relentto JEPCO & IDECO 5,706 17,118 3

Future Loans:For the Project - IBRD 11,667 35,000 6

- Other Cofinanciers 69,133 207,400 35For other Projects - Unidentified Loans 7,428 22,284 3

Total Borrowings 103,893 311,680 52

Total Sources 200,021 600,063 100

/1 Includes JD 4,116,000, the employees' salaries capitalized./2 Includes income from relending operations of JD 3,573,000, pole plant

depreciation of JD 660,000, and the net changes in retention money./3 Only about 57% of the JD 11.5 million to be collected would be

available to JEA's projects; the balance will have to be made availableto the rural electrification projects in JEPCO's & IDECO's concessionareas.

- 24 -

Future Financial Performance

3.11 JEA's ability to generate funds internally for expansion during

the years beginning with 1982 is dependent on a variety of factors such aswages and salaries, fuel costs, efficiency of the use of electricity bylarge industrial consumers, structure and level of tariffs, capitalization,etc., many of which are outside JEA's control. The Government and JEA are

contemplating two specific measures to achieve operational economies in thepower subsector and to strengthen JEA's finances. JEA will review its

tariffs beyond 1982 with a view to restructuring tariffs. Another measureenvisaged by the Government is a study of the efficiency of use ofelectricity by large industrial consumers such as cement, refineries andnew incoming industries including the possibility of co-generation so thatmaximum economies in operation could be achieved.

3.12 The forecast income statements, balance sheets, and funds

statements for the years 1982-87 at current costs are given in Annexes 3.3through 3.5 (assumptions relating to these are given in Annex 3.6).Assuming that the Government would compensate JEA for supplies to certainconsumers (para. 3.08) at less than the economic cost under the existingtariff structure, (i.e. free street lighting and rural supply at subsidizedprices) until such time a decision on tariff increase is taken and that itwould grant a tariff increase of about 20% not later than May 1, 1983 andanother increase of 13.0% from January 1984 to meet the revenue covenantrequirements, JEA would generate internally (including customercontributions, etc.) 27% of its average construction requirements in 1982,25% in 1983, 35% in 1984, 45% in 1985, 85% in 1986 and 107% in 1987. Theprojected self-financing level is high in 1985, 1986 and 1987 because theinvestments are not evenly distributed throughout 1982-1987. Theinvestments are highest in 1983 and 1984 because of coincident peakinvestments in the Project, ongoing works, and the additional 66-MW unit atthe Hussein Power Station. Moreover, these investments would cover almostall the additional power generation and transmission requirements up to1990 (Annex 1.9). The net internal generation from all sources includingcustomer contributions, etc., (after meeting working capital needs) butexcluding amortization from relending operations would be about 44% of the

construction requirements in 1982-87, which is commendable. JEA's rate ofreturn on revalued assets would be 2.1% in 1982, 4.6% in 1983, 12.1% in1984 and 13.4% in 1985, and would fall to 12.0% in 1986 and 8.7% in 1987with the commissioning of the Project without full absorption of capacity.The rates of return in 1982 (2.1%) and 1983 (4.6%) are low because of theimpact of the two fuel price increases in 1981 (50% in February and 11% inNovember), which JEA has not been able to pass on to the consumers.

3.13 During the forecast period, JEA's debt/equity ratio of between41/59 and 52/48 for its direct debt, and the ratio of between 42/58 and55/45 for the total debt reflect an acceptable equity base. During thisperiod, the current ratio would be between 1.1 and 3.1, which issatisfactory.

- 25 -

Debt Service Coverage

3.14 Under the existing debt service covenant, JEA is required toobtain the Bank's prior approval for any new 'Long-term borrowing unless thenet revenue for each year during the term of i:he debt (before depreciationand interest) is at least equal to 1.5 times *:he projected debt servicerequirement for such year on all its debt inc'Luding the debt to beincurred. JEA's debt service coverage ratio (luring 1982-1987 is projectedto be between 2.0 and 2.8, which is satisfactory. The existing debtservice covenant in Loan 1986-JO would be repeated in the proposed loan.

Auditin

3.15 Under existing loans, JEA has agreed to submit its auditedfinancial statements and the audit reports fo:- a fiscal year within fourmonths of the close of the year. JEA has been in compliance with thiscovenant. The accounts of JEA are audited annually by auditors appointedby the Board in accordance with the General ELectricity Law. Shair & Co.,a local firm of chartered accountants, has been appointed by the Board forthis purpose. The auditing arrangements are satisfactory. The existingcovenant in Loan 1986-JO would be repeated in the proposed loan.

Insurance

3.16 JEA's purchases from abroad are insu::ed by the suppliers duringthe construction period. Insurance coverage Eor its assets in operation isprovided through private local insurance companies to cover the usualrisks. These insurance arrangements are acce table. Also under theexisting loans, JEA has agreed to have qualified inspectors make annualinspection of its boiler and generating equipmnent to comply witb soundpublic utility practices. These covenants would be repeated in theproposed loan.

Jordanian Electric Power Company (JEPCO)

3.17 JEA and JEPCO are inter-dependent since about 70% of JEA's salesare to JEPCO. Therefore, JEA's expansion plans have to be considered inrelation to those of JEPCO. For financing it;3 expansion, JEPCO has in thepast depended on its own internal cash generation, the proceeds from saleof shares and loans onlent by JEA. However, since 1980 it has had accessto bilateral/international funds. Its borrowings during the last two yearsinclude a US AID Loan of US$9 million, a Euro,ean Investment Bank Loan ofUS$5.5 million and the Bank Loan (1986-JO of 1981) of US$20 million.JEPCO's construction program for 1981-1985 is estimated to cost aboutUS$130 million, which is expected to be finan:ed through internal cashgeneration (25%), borrowings (70%) and sale oE shares (5%).

3.18 JEPCO's past financial performance has been satisfactory. During1978-81, JEPCO had a sales growth of about 12't p.a. In this period itspretax rate of return on assets valued at historical costs has been between10.1% and 12.9% as compared to 4.6% to 9.7% a:hieved by JEA. However, its

- 26 -

return after a 38.5% corporate tax has been between 5.0% and 7.6% andaverage net internal cash generation, after debt service and dividendpayments, has been sufficient to meet about 32% of its constructionrequirements. Its debt/equity ratio which has been between 22/78 and 29/71during 1978-81 indicates a sound equity base, particularly since the assetsare being recorded at historical costs.

3.19 JEPCO's financial forecasts for 1982-85 indicate that itsfinancial position would be sound during this period provided that theGovernment grants appropriate tariff increases as required under Loan1986-JO to enable JEPCO to generate at least 25% of its constructionrequirements in 1982 and 1983 and at least 35% in 1984 and thereafter.

IV. PROJECT JUSTIFICATION

A. Load Forecast

4.01 A forecast of electricity sales for the period 1981-1995 wasprepared by the JEA (Annex 4.1). According to this forecast, demand forpower is expected to grow from 194 MW in 1981 to 1,145 MW in 1995. Demandfor energy, on the other hand, will reach 6,073 GWh in 1995 from its 1981level of 1,064 GWh. The relatively high rate of growth in the overalldemand for electricity is primarily due to the expansion of existing loadcenters and the addition of new industrial loads. The household demand for

electricity, which accounts for about a third of the total consumption, isexpected to continue its high growth rate, since it is largely a functionof the level of income, a large portion of which is determined by theinflow of remittances from the Gulf countries. The fact that thesubstantial tariff increases of 1980 led to only a very temporary drop inthe household consumption of electricity supports the view that higherprices would be absorbed by the consumers. Introduction of increasingblock rates (see para. 1.27), however, could help restrain the growth ofdemand in this sector.

B. The Least Cost Alternative

4.02 The Project is an integral part of the least cost program for thedevelopment of the power subsector in Jordan. The program was formulatedby consultants and JEA. It was reviewed by the Bank and found to besatisfactory. The need for the additional capacity to be provided by theProject was dictated by the forecast demand for electricity and theconfiguration of the existing system. Another critical issue was thechoice of the fuel to be used. Two alternative fuels were examined indetail: fuel oil and coal. The fuel oil alternative was found to be theleast cost alternative because coal would require the construction ofreceiving and handling facilities in an extremely congested port (Aqaba)which would have delayed the commissioning of the power plant by about twoyears. This would have necessitated the installation of gas turbines to

- 27 -

maintain adequate reserve and meet the growth in industrial demand forelectricity until the Project is commissioned. However, the operation ofthe first phase by burning fuel oil does not preclude the use of coal insubsequent stages, if such use is justified oa both technical and economic

grounds (para. 2.03).

C. Return on Investment

4.03 The return on the investment is 10.4Z based on the measurablebenefits and cost associated with the Project and defined over its expectedlife (for details, see Annex 4.2). The measurable costs include thecapital cost of the Project (para. 2.09), the economic cost per kWhdistributed, the fuel cost, and the operation and maintenance cost. Sincethe Project includes the cost of the 400-kV Aqaba-Amman transmission link,this cost was taken as a proxy for the economic cost of transmission. Themeasurable benefits include; the incremental revenue associated with theProject based on the prevailing average tariff of 35 fils/kWh (USc10.5/kWh)which is taken as a proxy for the consumers' willingness to pay, and thenet savings in fuel attributable to the displacement by the Project of theoutput that would otherwise be produced by existing higher cost plants.Both costs and benefits are expressed in end-1981 prices except for fuelwbose price is escalated by 3% p.a. between 1981 and 1990 to accommodatethe expected increase in the real price of imported oil. Furthermore, onlythe fuel prices and the foreign cost component of the capital cost of theProject are expressed in their equivalent border prices. Other costs andbenefits are expressed in terms of their domestic prices because conversionfactors for expressing domestic prices in their equivalent border valuesare not available.

4.04 Although the return on the investment in the Project comparesfavorably with the opportunity cost of capital (about 10%), it nevertbelessunderstates the real return on the Project since it was obtained under theassumption that fuel prices would increase in real terms 3% p.a. while theaverage tariff was assumed to remain unchanged. If the 1981 fuel pricesare used, the return on investment increases to 13.2%. Under eitherassumption, the rate of return supports the statement made earlier aboutthe adequacy of the prevailing tariffs in conveying to consumers the costincurred in meeting their demand for electricity (para. 1.26).

V. AGREEMENTS REACHED AND RESCOMMENDATIONS

5.01 The Government has agreed;

(a) to review witb the Bank, by not later than June 30, 1983, aplan for strengthening the planning and management of theenergy sector and for improving the coordination among theenergy-related institutions in Jordan (para. 1.13);

- 28 -

(b) to complete the pipeline between Zarqa and Aqaba not laterthan March 31, 1986 (para. 2.04);

(c) to take all actions required to enable JEA to increase itselectricity tariffs so as to reflect future increases in itsfuel cost (para. 3.05); and

(d) to continue to ensure at all times that JEA will be chargedthe domestic price of fuel oil (para. 3.06).

5.02 The Government and JEA have agreed:

(a) to complete, by December 31, 1982, an assessment of theeffects on the resources mobilized by the power subsector ofintroducing increasing the block rates in the tariffstructure for electricity sales to the low-voltage consumers,

to review with the Bank, by December 31, 1982, therecommendations emanating from that assessment, and toimplement tariffs and other measures thus determined(para. 1.27); and

(b) to the revenue covenant in Section 4.03 of the JEA ProjectAgreement under Loan 1986-JO being repeated in the proposedloan (3.06).

5.04 JEA has agreed;

(a) to make, by December 31, 1983, arrangements with theGovernment agency operating the Aqaba industrial portfacilities for the utilization of these facilities for thestand-by fuel oil supply to the Aqaba power station(para. 2.05);

(b) to continue to employ consultants, with qualifications,experience and conditions of employment satisfactory to theBank, for engineering services, procurement, supervision oferection and initial operation of the Project (para. 2.08);

(c) to take not later than March 31, 1983, appropriate measuresto strengthen its financial and accounting department(para. 3.02);

(d) to take, not later than December 31, 1982, appropriatemeasures to improve its financial planning activities(para. 3.03);

(e) to the existing covenants in the JEA Project Agreement underLoan 1986-JO relating to debt service coverage (para. 3.14),auditing (para. 3.15) and insurance (para. 3.16) beingrepeated in the proposed loan.

- 29 -

5.04 With the assurances listed above, the Project would provide asuitable basis for a Bank loan of US$35 miLlion to the Government for aperiod fo 17 years, including 4 years' of grace. Under a separatesubsidiary loan agreement, the Government would onlend the Bank Loan to JEAfor a term of 17 years with 5 years' grace and cover all Project costoverruns (para. 2.13). JEA would bear the foreign exchange risk on theloan.

5.05 The signing of the loan agreements with the co-financiers for the

amount of at least US$85 million and the final commitment, in the formsatisfactory to the Bank, for not less than US$30 million, and theexecution of the subsidiary loan agreement shall be conditions of loaneffectiveness (para. 2.13).

- 30 -

ANNEX 1. 1

JORDAN

FIFTH POWER PROJECT

Electricity Tariffs in Jordan(February 1980)

All Districts Irbid District

1. Bulk Supply Tariffa. Maximum Demand 2.4 JD/kW 2.4 JD/kW

b. Day Energy 18.5 Fils/kWh 17.5 Fils/kWhc. Night Energy 13.5 Fils/kWh 12.5 Fils/kWh

JEA JEPCO IDECO

2. Retail Tariff

a. Domestic 37 Fils/kWh 37 Fils/kWh 52 Fils/kWh

b. Commercial 45 Fils/kWh 45 Fils/kWh 57 Fils/kWh

c. Small Industries.1-2,500 kWh/month 39 Fils/kW 39 Fils/kW 44 Fils/kW

Over 2,500 kWh/month 27 Fils/kWh 37 Fils/kWh 34 Fils/kWh

d. Large Industries.1. Maximum Demand 3.05 JD/kW 3.05 JD/kW 3.05 JD/kW

2. Day Energy 23 Fils/kWh 23 Fils/kWh 22 Fils/kWh3. Night Energy 15 Fils/kWh 15 Fils/kWh 14 Fils/kWh

e. Water Pumping 28 Fils/kWh 28 Fils/kWh 28 Fils/kWh

f. Street Lighting No charge No charge No charge

g. Minimum Charge:1. Domestic 1 JD/month 1 JD/month 1 JD/month

2. Commercial and

Small Industries 1.25 JD/month 1.25 JD/month 1.25 JD/month

October 1981

JORDANFIFTH POWER PROJECT

JORDAN ELECTRICITY AUTHORITYORGANIZATION CHART

0 P~~~~~~U AI C ISU S O D .OcFNn .AL ESU OUlt N S *U UL T N flONE SS A U<|C H nun ST T S OS.OPL N D O E Cr N T 050 L .J DPTE llETM

SECA.PDTS , l j HFLEt n.TUE USO nnlsT SUCTIS CET CSLOPOEAllT SEOSTS1GD PSTEn rnlreoUSnNT erIOUE SSn,Sf

rn,o n CU9EDCA SUSnS9UOISICTN I ECUIn |REEAC ni RJFl SSC U e El. RnGnP0Ee Tn S TINA

2 iEVENUES l I AQTRATPDW l >E TRICA! n I AnNSenETTSNonS U

STUn n S_TL_INFML.E Zl-E A, A 'FEEL l E..

[7j LA AN At<F 4

F ;H

JORDAN

FIFTH POWER PROJECT

Generation, Consumption and Peak Loads (1971-1980)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

A. IJnits Generated (GWh)

JEPCO 133.8 158,0 181.4 213.4 211.7 161.2 12.1 5.3 1.0 -

IDECO 12.0 14.5 16.o 18.1 29.8 43.7 33.5 25.7 33.0 39.4

JEA (Amman) - - - - 45.1 162.5 407.3 503.7 649.4 811.3

Cement Co. 54.2 64.6 70.7 67.3 65.6 64.7 63.2 64.9 70.4 56.7

Phosphates 5.9 6.9 8.4 10.3 12.7 20.1 20.9 24.5 43.5 56.o

Refinery 11.6 15.3 17.2 17.4 15.1 15.6 16.1 16.9 18.2 18.6

Aqaba (JEA) 5.7 7.3 8.1 8,8 10.1 15.4 19.5 cJ.l 33.5 4o.8

Others 7.2 11.6 13.4 15.1 17.2 19.5 22.3 36.8 28.o 47.2

Import - - - - - 12.6 20.8 8.0 -

TOTAL 230.4 278.2 315.2 350.4 407.3 502.7 607.5 723.7 885.0 1,070.0

B. Units Consumed (G,Wh)

JEPC 0 112.9 134.7 153.8 178.7 213.6 269.1 329.6 399.7 476.7 558.2

IDECO 8.8 11.5 13.0 13.5 22.0 33.3 44.6 53.7 67.4 74.2

Cement 53.3 63.6 69.8 66.1 64.6 63.7 62.2 63.0 70.4 102.06.9 8.4 10.3 12.7 20.1 20.8 22.7 43.4 48.1

Refinery 11.6 15.3 17.2 17.4 17.3 19.8 20.9 22.0 18.2 26.2

Aqaba (JEA) 5.5 7.2 7.9 8.5 9.1 13.3 13.3 17.7 24.7 31.0

Others 6.o 9.7 11.2 12.6 16.2 16.0 21.4 17.2 22.2 37.3

TOTAL 204.0 248.9 281.3 307.1 355.5 435.3 512.8 596.o 723.0 -877.0

C. Peak Loads (Mw)

JEPCO/JEA 31.1 34.9 38.6 46.4 57.4 71.4 89.4 93.4 115.2 119.0

IDECO 4.0 4.6 5.3 5.8 8.0 10.7 14.5 22.0 23.1 25.0

Cement 9.0 10.4 11.2 10.8 I0.4 10.6 10.3 10.4 23.6 22.0

Phosphates 1.9 2.2 3.1 3.6 3.7 4.3 6.2 8.0

Refinery 2.4 2.8 3.3 3.4 5.4 5.9 5.0

Aqaba 2.3 2.8 3.4 4.3 5.6 7.6 9.0

Others _ 5.0 3.3 3.8 4.0 5.1 6.o 8.o

Non-coincident Total Peak Load 44.1 49.9 57.0 74.9 87.8 106.8 129.6 146.2 187.6 .196.0

October 1981

H

JORDAN

FIFTH POWER PROJECT

JEPCO and IDECO - Basic Statistical Data

a) JEIO

Purchased Maximum -------------------- ---------------- Sales (GWh)-----------------_____________________Number of Generation from JEA Demand Commercial/ Hospitals/ Broad- Street- 9

Year Consumers (GWh) (GWh) (MW) Domestic Government Industrial Schools, etc. casting lighting TOTAL Increase

1963 29,956 97.4 - 15.0 11.6 7.7 23.5 2.8 3.4 1.1 50.11964 33.695 66.o - 14.6 15.0 8.9 25.6 3.2 3.5 1.2 57.4 14.61965 37,536 72.8 - 15.7 17.8 9.5 27.8 3.2 3.7 1.3 63.3 10.31966 4i,564 81.7 - 17.9 21.1 10.2 30.4 3.4 3.9 1.9 70.9 11.91967 46,o80 91.6 - 20.4 23.7 11.4 33.0 4.2 3.4 2.3 78.0 MO,01968 50,662 104.4 - 22.9 28.3 13.7 35.1 4.8 3.5 2.8 88.2 13.11969 56,738 122.7 - 27.8 33.9 16.7 39.4 5.7 3.2 3.3 102.2 15.81970 61,161 119.9 - 29.8 34.o 17.0 34.6 9.1 3.5 2.9 101.1 -1.11971 66,683 133.8 - 31.1 40.2 19.9 31.9 13.2 3.9 3.8 112.9 11.71972 73,883 158.0 - 34.9 47.6 24.2 33.3 20.1 4,9 4.5 134.7 19.31973 81,738 181.0 - 38.6 53.9 26.6 38.1 24.8 4.8 5.6 153.8 14.11974 88,050 213.4 - 46.4 64.o 31.6 41.8 28.6 5.3 7.4 178.7 16.21975 95,319 211.7 42.4 55.0 77.7 37.1 53.9 32.0 5.3 7.6 213.6 18,61976 102,866 161.2 154.9 66.3 97.6 46.7 73.9 37.3 5.3 8.3 269.1 26.81977 111,248 12.1 368.2 79.0 152.5 5o.4 66.8 44.4 5.9 9.6 329.6 22.61978 121,490 5.3 436.o 93.4 196.1 59.2 74.9 52.2 5.9 10.2 398.2 20.81979 135,305 1.0 535.0 115.2 233.5 77-2 93.7 56.2 6.2 9.9 476.7 19.71980 150,765 - 610.3 119.0 259.8 86.3 123.3 71.9 6.2 10.7 558.2 17.1

b) IDECO------------ -- ____- ------- _-_--_------------Sales (GWh)…---…-_--- - --------------------------

Number of Generation Purchased from Maximum C- Hc i MccPt+a1h S+ 9tr-t-

Year Consumers 1GWh) JEA (GWh) Demand (MW) Domestic Government Industrial Schools, etc. lighting TOTAL Increase

1968- 11,859 7.5 - 2.6 3.32 0.71 1.01 0.21 o.65 5.901969 13,153 8.5 - 2.7 3.71 0.87 1.21 0.24 o.67 6.70 13.11970 15,184 8.9 - 2.9 3.73 0.87 1.30 0.30 0.70 6.90 3,11971 18,812 12.0 - 4.o 4.89 o.96 1.45 0.35 1.15 8.80 26.31972 22,800 14.5 - 4.6 6.75 1.39 1.57 0.39 1.34 11.50 30.51973 25,337 16.0 - 5.3 8.10 1.50 1.60 o.40 1.40 13.00 13.81974 27,208 18.1 - 5.8 6.90 1.70 2.00 1.50 1.40 13.50 3.81975 30,898 29.8 - 8.o 9.40 1.80 7.10 2.20 1.50 22.00 68.o1976 34,790 43,7 - 10.7 11.80 2.60 15.20 2.20 1,50 33.30 50.01977 39,634 33.5 23.0 14,5 15.10 5.2 18.00 4.60 1.70 44.6 33.91978 42,985 26.0 42.0 22.0 18.5 4.o 23.5 5.4 2.2 53.6 20.21979 46,159 33.0 53.0 23.1 24.9 6.9 26.2 6.o 2.9 66.9 24.81980 49,687 39.4 54.1 25.0 32.0 9.1 23.7 6.2 3.2 74.2 10.9

1/ The first year of IDECO's commercial operation.

October 1981

- 34 -

ANNEX 1.5

JORDAN

FIFTH POWER PROJECT

Generation Installed Capacity (MW)

Steam Gas Diesel Total

1. Existing

a) JEAHussein 1-3 3x33 lx18 - 131

- lx14 -

Marqa - 4x20 40 120

Old Aqaba - - 7 7

Central Aqaba - - 2x3.5 7

Karak - - 3x1.5 4.5

Ma' an - 1.5 1.5

Subtotal 99 112 60.0 271.0

b) OthersIrbid - - 11 11

Cement Factory - 9 9

Refinery 2.4 - 2.4 4.8

Phosphate Co. - - 25 25

Divers 21.0 21.0

Subtotal 2.4 - 68.4 70.8

Total 101.4 112 128.4 341.8

2. Future

a) JEA1981 lx66 20 5 91

1982Hussein 5-6 2x66 - - 132

Aq aba - 2x5 10

1984Hussein 7 1x66 - - 66

1986Aqaba

2 x130 - - 260

b) Others1981

Refinery 2x6 - - 12

Potash lx15 - - 15

1982Fertilizer 2x22 - - 44

January 1982

- 35 -

ANNEX 1.6

JORDAN

FIFTH POWER PROJECT

Forecast Electric Energy Balances(Total Power System)

-----------------------------in GWb-----------------------------1981 1982 1983 1984 1985 1986 1987

JEA SALESJEPCO 680 760 853 956 1,070 1,199 1,342IDECO 78 104 115 160 183 207 233JEA Direct Sales:

Large Consumers 134 229 289 534 736 788 877Other Consumers 71 81 _ 95 108 129 144 162

Total 963 1,174 1,352 1,758 2,118 2,338 2,614

LOSSESNetwork 21 25 30 36 43 48 57Station Supply 80 96 L15 134 162 178 210

Total 101 121 L45 170 205 226 267

REQUIRED GENERATION 1,064 1,295 1,497 1,928 2,323 2,564 2,881OF WHICH:

Steam PlantHussein 3x33 MW 627 336 257 359 533 86 86Hussein 4x66 MW 100 700 l,C'00 1,222 1,325 1,350 897Aqaba __ _ _ 1,000 1,754

Total Steam 727 1,036 1,'57 1,581 1,858 2,436 2,737

Combustion TurbinesZarqa 5 13 15 29 58 34 38Mar-qa 90 31 36 69 140 75 84Karak 8 9 17 35 19 22

Total Gas Turbines 95 52 60 115 233 128 144

Diesel UnitsMarqa 171 146 127 164 164Karak 16 14 12 15 15Ma'an & Tafila 7 6 5 7 7Aqaba 48 41 36 46 46

Total Diesel 242 207 130 232 232

IMPORT FROM SYRIA - - - - - - -

October 1981

- 36 -

ANNEX 1.7Page 1 of 2

JORDAN

FIFTH POWER PROJECT

Forecast Balances of Electric Energy and Capacity(Interconnected System)

------------ ---------------- in GWh-----------------------------1981 1982 1983 1984 1985 1986 1987

JEA SALESJEPCO 680 760 853 956 1,070 1,199 1,342IDECO 78 104 115 160 183 207 233JEA Direct Sales:

Large Consumers 134 219 263 534 736 788 877Other Consumers 11 38 45 108 129 144 162

Total 903 1,121 1,276 1,758 2,118 2,338 2,614

LOSSESNetwork 19 23 26 36 43 48 57Station Supply 72 88 100 134 162 178 210

Total 91 111 126 170 205 226 267

REQUIRED GENERATION 994 1,232 1,402 1,928 2,323 2,564 2,881OF WHICH:

Steam PlantHussein 3x33 MW 627 336 257 359 533 86 86Hussein 3x66 MW 100 700 1,000 1,222 1,325 1,069 693Aqaba 2x130 MW _ 1,281 1,958

Total Steam 727 1,036 1,257 1,581 1,858 2,436 2,737

Combustion TurbinesZarqa 1+2 5 13 15 29 58 34 38Marqa 3+4+5+6, Karak 1 90 39 29 86 175 94 106

Total Gas Turbines 95 52 60 115 233 128 144

Diesel UnitsMarqa 171 144 101 164 164

Karak 15 15Ma'an 7 7Aqaba_ 46 46

Total Diesel 171 144 101 232 232

LOAD FACTOR 58.5 58 56 57 57.5 56 57.3

MAXIMUM DEMAND (MW) 194 242 286 387 461 522 574

October 1981

37 - ANNEX 1.7Page 2 of 2

JORDAN

FIFTH POWER PROJECT

Forecast Balances of Electric lEnergy and Capacity(Interconnected System)

----------------------------- in GWb-----------------------------1981 1982 1933 1984 1985 1986 1987

PLANT CAPACITIES (NW)

Steam PlantHussein 1, 2 62 62 62 62 62 62 62Hussein 3 31 31 31 31 31 31 31Hussein 4 62 62 62 62 62 62 62Hussein 5 62 62 62 62 62 62Hussein 6 62 62 62 62 62 62Aqaba 1, 2 _ _ _ 260 260

Subtotal 155 279 ,79 279 279 539 539

Combustion TurbinesZarqa 1, 2 31 29 29 29 29 28 28Marqa 3, 4, 5, & 6 72 72 70 70 70 68 68Karak 1 18 18 18 18 18 18

Subtotal 103 119 L17 117 117 114 114

Diesel UnitsMarqa 40 36 32 30 28 26 24Irbid 8 8 7 7 6Karal 4 4 4 4 4El-HasaMa'an 1 1 1 1Aqaba 22 22 20 20

Subtotal 52 49 44 64 61 46 44

SYRIAN INTERCONNECTION

Total Available Capacity 310 447 440 460 457 699 697

AVAILABLE CAPACITY MARGIN- MW 116 205 154 73 -4 177 123- Z 37 46 35 16 - 25 18

October 1981

- 38 - ANNEX 1.8Page I of 2

JORDAN

FIFTH POWER PROJECT

Forecast of Sales for Consumer Categories

… -------------------------- …in GWh-------------------1981 1982 1983 1984 1985 1986 1987

JEP CODomestic 277.2 309.8 347.9 389.6 436.2 488.7 547.2Commercial 97.3 108.7 122.1 136.7 153.1 171.6 192.1Industrial 132.2 148.2 165.9 1895.8 208.0 233.1 760.9Uospitals, etc. 47.7 53.4 59.9 67.1 75.1 84.2 94.2

Water Pumping 33.0 36.9 41.5 46.4 52.0 58.4 65.2Street Lighting 13.5 15.0 16.9 18.9 21.2 23.7 26.6Others 11.1 12.0 13.8 15.5 17.4 19.3 21.8

Total Sales by JEPCO 612.0 684.0 768.0 860.0 963.0 1,079.0 1,208.0

Distrihuition Losses 68.0 76.0 85.0 96.0 107.0 120.0 134.0Total Sold to JEPCO 680.0 760.0 853.0 956.0 1,070.0 1,199.0 1,342.0

IDECODomestic 35.0 42.2 46.2 52.9 61.3 69.3 78.0Commercial 9.0 10.8 11.8 13.6 15.7 17.7 20.0Industrial 9.6 11.6 12.7 14.5 16.8 19.0 21.4

Water Pumping 21.6 25.9 28.4 32.6 37.7 42.6 48.0Others (Hospital & Street Lighting) 12.8 15.5 16.9 19.4 22.5 25.4 28.6

Total Sales by IDECO 88.0 106.0 116.0 133.0 154.0 174.0 196.0

Distrihution Losses 20.0 23.0 24.0 27.0 29.0 33.0 37.0Total to he supplied 108.0 129.0 14 10. 60.0 183.0 207.0 233.0

Own Generation 30).0 25.0 25.0Total Sold to IDECO 78.0 104.0 115.0 160.0 183.0 207.0 233.0

LARGE CONSUMERSFitheis Cement 80.0 80.0 80.0 188.0 188.0 188.0 188.0Zarqa Refinery 19.0 19.0 19.0 19.0 24.0 24.0 24.0Ghor Safi Potash Factory 35.0 66.0 66.0 79.0 96.0 106.0 106.0El-Hasa Phosphates Factory 38.0 38.0 53.0 53.0 53.0 53.0Rashadiya Cement Works 66.0 134.0 135.0 137.0Queen Alia Airport 16.0 26.0 52.0 58.0 63.0 80.0EGM'C Puimping Project 85.0 85.0 114.0El Shadia Phosphates 19.0 39.0White Cement 16.0 17.0 17.0 17.0 17.0Sahab Industrial Estate 18.0 29.0 45.0 58.0 74.0Jordan Fertilizer Indutstry 5.0 10.0 14.0 19.0Wood Plant . 10.0 26.0 26.0 26.0 26.0 26.0

Total 134.0 229.0 289.0 534.0 736.0 788.0 877.0

January 1982

- 39 - ANNEX 1.8Page 2 of 2

JORDAN

FIFTH POWER PROJECT

Forecast of Sales for Consumer Categories

----------------------------- …in GWh…----------------------------1981 1982 1983 1984 1985 1986 1987

Other Direct ConsumersJordan Valley 11.0 14.0 18.0 18.0 22.0 22.0 26.0Karak, Tafilah & Shoubak 15.5 17.0 19.0 21.0 23.0 26.0 28.0Ma'an & Wadi Musa 6.5 7.0 8.0 10.0 13.0 15.0 17.0Aqaba 38.0 43.0 50.0 59.0 71.0 81.0 91.0

Subtotal 71.0 81.0 95.0 108.0 129.0 144.0 162.0

Total Interconnected 903.0 1,121.0 1,276.0 1,758.0 2,118.0 2,338.0 2,614.0

Non Interconnected 60.0 53.0 50.0

Total Sales 963.0 1,174.0 1,252.0 1,758.0 2,118.0 2,338.0 2,614.0

January 1982

JORDAN

FIFTH POWER PROJECT

JEA's Development Pro gram CostsV YJDousands)

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Total

Projects in L 9,758 5,527 4,940 1,600 800 22,625Execution F 18,119 9,442 7,410 2,400 1,200 38 571

T 27,877 14,969 12,350 4,000 2,000 .

Fifth Power L 157 565 5,816 6,982 5,291 3,599 22,410Project F 573 4 746 12 247 25 154 13,727 9,777 66 224

Tf 7 3-0 5,311 1,6 32,136 19,018 13,376L86

Future Projects L 86 257 430 86 319 1,700 2,750 3,700 3,400 12,728F 694 2,083 3470 694 676 6000 10,350 13,800 12,500 50,267T 780 2,340 3,900 780 995 7,700 13,100 17,500 15,900 62,995

Miscellaneous L 275 405 438 465 487 1,005 995 1,100 1,100 1,395 7,665Projects F 275 505 537 565 588 1,605 1,595 1,700 1,700 2,195 11,265

T 550 910 975 1,030 1,075 2,610 2,590 2,800 2,800 3,590 18,930

Subtotal L 10,190 6,583 11,451 9,477 6,664 4,923 2,695 3,850 4,800 4,795 65,428F 18,967 15,387 22,277 31,589 16,209 12,058 7,595 12,050 15,500 14,695 166,327T 29,157 21,970 33,728 41,066 22,873 16,981 10,290 15,900 20,300 19,490 231,755

Price L 64 807 1,625 1,670 1,697 1,330 2,475 3,675 4,230 17,573Contingencies F 394 2,128 6,427 4,474 4,747 4,030 7,875 12,375 13,730 56,180

T 458 2,935 8,052 6,144 6,444 5,360 10,350 16,050 17,960 73,753

Total Costs L 10,190 6,647 12,258 11,102 8,334 6,620 4,025 6,325 8,475 9,025 83,001F 18,967 15,681 24,405 38,016 20,683 16,805 11,625 19,925 27,875 28,425 222,407T 29,157 22,428 36,663 49,118 29,017 23,425 15,650 26,250 36,350 37,450 305,508

L = Local; F = Foreign; T Total

January 1982

- 41 -

ANNEX 2.1Page 1 of 2

JORDAN

Fifth Power Proiect

Description of Pro.ect

A. Aqaba Power Station

Steam Generators

1. The steam generators will be of the balanced draft type withsuperheater, reheater and economiser sections. The boiler will be ofwelded wall construction and will be top supported from the steelstructure. It will be of the outdoor type; furnished with regenerative airheaters. Each steam generator will have an approximate superheater outletflow of 107 kg/s (850,000 lb/hr,) and steam temperature of 540.50C(1005 F) plus or minus 5.50C (100F). The boiler minimum stable loadwill be equal to 20% of the maximum continuous rating (MCR). The furnacewill be fully water-cooled and gas tight using welded wall panels. Thesuperheater and its control system will maintain the final steamtermperature from 40% to the MCR with a tolerance of +(-) 5.50C. Onestage of reheating will be provided. The boiler will be equipped withburners suitable for firing heavy fuel oil and designed to limit nitrogenoxide emissions.

Turbines

2. Turbine will be a tandem compound, double flow, condensingexhaust, single reheat, extraction type operating at 170kg/cm2 abspressure and main/reheat temperatures of 5380C/d380C (1000OF/10000F). Seven stages of feedwater heating will be used: two highpressure, four low pressure and one deaerating feedwater heater. Eachunit's guaranteed gross output at the generator terminals will be 130 MW atthe preceding conditions.

Condensers

3. Each condenser will be of the single pass, single-shell, singlepressure type with the surface area of 6,5(10 m2 (70,000 ft2) and sodesigned to create the lowest economically feasible turbine operating backpressure (6.4 cm Hg). The condenser will be capable of continuousoperation with one half of the surface area out of service. Steam jetejectors will be used for initial evacuation of air and noncondensiblesfrom the main condenser.

- 42 -

ANNEX 2.1Page 2 of 2

Water Treatment

4. The demineralizer system will process well water to provide thehigh purity demineralized water required for make-up to the high pressuresteam generators. The system includes the service vessels, pipingarrangements, regeneration equipment and auxiliary components.

Fuel Oil Systems

5. The fuel oil system will provide all fuel oil service requirementsof the steam generators, utilizing heavy oil for primary fuel and oil No. 2for ignition and start-up. The system will include on-site delivery,storage, transfer, conditioning and control. Heavy fuel oil will bedelivered to the site by the pipeline from the Zarqa refinery and pumpedinto two 40,380n3 storage tanks. These tanks will permit 60 dayscontinuous operation of the power station at 75% capacity factor. JEAplans to utilize the fuel unloading facilities of the nearby JordanFertilizer Industries plant as a stand-by fuel supply. The facility issuitable for handling 1,000 tons of oil per hour.

Electrical Equipment

6. The generator power system will consist of two generators, mainpower transformers and interconnecting equipment to deliver the plantoutput to the 132-kV switchgear. The generators will be 160 MVA, 15-kV,50 Hz, 0.85 power factor, short circuit rati.o not less than 0.58. The mainpower transformers will be three-phase, self/forced air cooled, 15/132-kV,capable of delivering the generator rated output. The 132-kV switchyardwill be located near the power station and connected to the JEAtransmission network.

B. Transmission Line Aqaba-Amman

7. In the absence of statutary regulations for the construction ofoverhead lines in Jordan, the design of the transmission line is made inaccordance with generally accepted international practices. Theconsultants study concluded that 4 x 200 mm2 bundle conductor at 400 kVis the optimum arrangement. The line between Aqaba and Amman passesthrough several areas where phosphates are mined and in other areas whereaggressive salts occur in the soil which could be carried into the air bywind. To avoid bimetallic corrosion it is recommended to use an aluminumalloy conductor, which would also perform satisfactory in the marineatmosphere near Aqaba. The earthwire material should also be aluminumalloy to provide acceptable screening factor. The line support will belattice steel towers of galvanized construction designed for a factor ofsafety of 2.5 throughout. Insulators should be of anti-fog type in thecoastal zone and open profile type in desert area.

October 1981

JORDAN

FIFTH pOWER PROJECT

Pr ject Cost Eatiaate(JD Thoouand)

---------- 1981--------- ---------- 1982--------- ---------- 1983…-------- ---------- 1984--------- ---------- 1985…--------- --------- 1986Ttl------- …--------Ttal-------

Loc'l Foreia n Total Loca Foreign Total c i tal Local F Total Local Foreign Tot al Local Foreigna Total Local/I Foreign Total

a) Pover Station

Site Investigation &Marine Survey

Base Coat 105 136 241 56 61 117 161 197 358

Pbysical Contingency 8 11 19 5 5 10 13 16 29

Total 113 147 260 61 66 127 174 213 387

Civil WorkISa.e Coot 2,750 3,586 6,336 2,301 3,149 5,450 1,000 1,793 2,793 1,302 2,145 3,447 7,353 10,673 18,026

Phynical Contingency 220 287 507 184 252 436 80 143 223 104 172 276 588 854 1,442

Subtotal 2,970 3,873 6,843 2,485 3,401 5,886 1,080 1,936 3,016 1,406 2,317 3,723 7,941 11,527 19,468

Price Contingency 385 502 887 540 739 12_79 336 603 939 569 938 1,507 1,830 2,782 4,612

Total 3,355 4.37537,730 3,02.5 4.140 7,165 1,416 2,539 3,955 1,975 3,255 5,230 9,771 14,309 24,080

Boiler Isoo.dBane Coat 218 1,381 1,599 636 4,020 4,656 1,001 6,324 7,325 780 4,934 5,714 485 3,075 3,560 3,120 19,734 22,854

Pbytical Contingency 17 110 127 51 322 373 80 506 586 62 395 457 39 246 285 249 1,579 1,828

Subtotal 235 1,491 1,726 687 4,342 5,029 1,08l 6,830 7,911 842 5,329 6,171 524 3,321 3,845 3,369 21,313 24,682

Price Continge-cy 10 65 75 89 563 652 235 1,483 1,718 262 1,660 1,922 212 1,344 1,556 808 5,115 5,923

Total 245 1,556 1,801 776 4,905 5,681 1,316 8,313 9,629 1,104 6,989 8,093 736 4,665 5,401 4,177 26,428 30,605

T-rbo/GOn-eator Inland-... Lu_. 160 1.444 1,604 997 9,035 10,032 417 3,773 4,190 303 2,745 3,048 1,877 16,997 18,874

Physical Contingency 13 116 129 64 72J 303 '' 372 3"I on 77O 244 150 1.361 1,511

Sbtotal 173 1,560 1,733 1,077 9,758 10.835 450 4,075 4,525 327 2.965 3,292 2,027 18,358 20,385

Price C-otingen-y 8 68 76 234 2,119 2,353 140 1,269 1 409 32 1200 1332 514 4 656 5,170

Total 18i1 1,628 1,809 1,311 11,877 13,188 590 5,344 5,934 459 4,165 4,624 2,541 23,014 25.555

S.itchyard IslaodBane Coot 32 157 189 278 1,326 1,604 71 342 413 42 203 245 423 2,028, 2,451

Physical Cootingency 3 13 16 22 106 128 6 27 33 3 16 19 34 162 196

Subtotal 35 170 205 300 1,432 1,732 77 369 446 45 219 264 457 2,190 2,647

Price Contingency 2 7 9 65 311 376 24 115 139 18 89 107 109 522 631

Total 37 177 214 365 1,743 2,108 101 484 585 63 308 371 566 2,712 3,278

Engineering Services 44 426 470 61 589 650 105 649 754 225 350 575 175 276 451 75 85 160 685 2,375 3,060

Total Station 157 573 730 585 4,016 4,601 4.236 9,929 14,165 8,242 26,423 32,665 3,386 15.632 19,018 3,308 12.478 15,786 17,914 69, 051 86,965

Houning 348 348 108 108 108 108 369 369 933 933

IDC _ _ _ _ 101 101 _ 480 480 _ 1,541 1.541 _ 2,783 2,783 _ 1,993 1,993 _ 6,898 6

G-and Total 157 573 730 585 4,117 4,702 4,584 10,409 14,993 6,350 27,964 34,314 3,494 18,415 21,909 3,677 14,471 18,148 18,847 75,949 94,796

/1 Includes indirect foreign costs.

October 1981

JORDANFIFTH POWER PROJECT

Project Cost Estimate

(JO Thousand)

____----1982--------- ---------- 1983--------- ---------- 1984…--------- --------- 1985------ ---------- 1986--------- --- Total (1982-1986)---Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total Local Foreign Total Local/l Foreign Total

bl Transmission Line

ConductorsBase Cost 355 355 1,380 1,380 1,380 1,380 713 713 355 355 4,183 4,183Physical Contingency 18 18 69 69 69 69 36 36 18 18 210 210tluhtoral 37 , 4 4 9 T7 1,449 1,449 1,449 749 ~7~T149 m 4,393 4,393Price Contingency 16 16 188 188 315 315 233 233 151 151 903 903Total 389 389 1,637 1,637 1,764 1,764 982 982 524 524 5,296 5,296

InsulatorsBase Cost 143 143 553 553 553 553 283 283 143 143 1,675 1,675Physical Contingency 7 7 28 28 28 28 14 14 7 7 84 84Subtotal 150 150 581 581 581 581 297 297 150 150 1,759Price Contingency 7 7 75 75 126 126 93 93 61 61 362 362Total T37 15 656 656 707 707 390 390 211 21 2,121 2,121

Towers, Fittings &Erect ion

sase Cost 282 292 1,548 1,135 2,683 1,548 1,135 2,683 2,321 586 2,907 774 297 1,066 6,191 3,440 9,631Physical Contingency 15 15 77 57 134 77 57 134 116 29 145 39 15 54 309 173 482Subtotal 307 307 1,625 1,192 2,817 1,625 1,192 7,817 2,437 615 3,052 813 307 1,120 6,500 3,613 10,113Price Contingency 13 13 211 155 366 353 259 612 759 192 951 329 124 453 1,652 743 2,395Total 320 320 1,836 1,347 3,183 1,978 1,451 3,429 3,196 807 4,003 1,142 431 1,573 8,152 4,356 12,508

Engineering ServicesBase Cost 38 38 77 153 230 77 153 230 116 77 193 38 38 76 308 459 767Physical Contingency 2 2 4 8 12 4 8 12 6 4 10 2 2 4 16 24 40Subtotal 40 40 81 161 242 81 161 242 122 81 203 40 40 80 324 483 807Price Contingency 2 2 11 21 32 18 35 53 38 25 63 16 16 32 83 99 182Total 47 42 92 187 274 99 196 295 160 106 266 56 56 112 407 582 989

Total Transmission 908 908 1,928 3,822 5,750 2,077 4,118 6,195 3,356 2,285 5,641 1,198 1,222 2,420 8,559 12,355 20,914

INC 27 27 169 169 407 407 599 599 372 372 1,574 1 , 574

Grand Total 935 935 1,928 3,991 5,919 2,077 4,525 6,602 3,356 2,884 6,240 1,198 1,594 2,792 8,559 13,929 22,488

/1 Incladen indirect foreign costs. X

0JJanuary 1982 ' ~

- 45 -

ANNEX 2.2Page 3 of 5

JORDAN

FIFTH POWER PROJECT

Project Cost Estimate by Contracts

Local Foreign l'otal Local Foreign Total------- -------US$ Millio

a. Aqaba Power Station,2x130 MW

--- Site Investigation &Marine Survey

Base Cost 0.048 0.069 0.117 0.144 0.207 0.351Physical Conting. 0.004 0.006 0.010 0.012 0.018 0.030

Total 0.052 0.075 0.127 0.156 0.225 0.385

--- Civil WorksBase Cost 5.514 12.512 [8.026 16.542 37.536 54.078Physical Conting. 0.441 1.001 1.442 1.323 3.003 4.326Price Contingency 1.372 3.240 4.612 4.116 9.720 13.836

Total 7.327 16.753 24.080 21.981 50.259 72.240

---Boiler IslandBase Cost 2.184 20.670 22.854 6.552 62.010 68.562Physical Conting. 0.174 1.654 1.828 0.522 4.962 5.484Price Contingency 0.566 5.357 5.923 1.698 16.071 17.769

Total 2.924 27.681 30.605 8.772 83.043 91.815

--Turbo/Generator IslandBase Cost 1.276 17.598 18.874 3.828 52.794 56.622Physical Conting. 0.102 1.409 1.511 0.306 4.227 4.533Price Contingency 0.349 4.821 5.170 1.047 14.463 15.510

Total 1.727 23.828 25.555 5.181 71.484 76.665

--Switchyard IslandBase Cost 0.262 2.189 2.451 0.786 6.567 7.353Physical Conting. 0.021 0.175 0.196 0.063 0.525 0.588Price Contingency 0.067 0.564 0.631 0.201 1.692 1.893

Total 0.350 2.928 3.278 1.050 8.784 9.834

--EngineeringServices 0.641 1.949 2.590 1.923 5.847 7.770

--Housing 0.933 . 0.933 2.799 . 2.799Total PowerStation Costs 13.954 73.214 87.168 41.862 219.642 261.504

- 46 -

ANNEX 2.2Page 4 of 5

JORDAN

FIFTH POWER PROJECT

Project Cost Estimate by Contracts

Local Foreign Total Local Foreign Total-------JD Millio…TISSn-- -U Million-----

b. TransmissionLine

--ConductorsBase Cost - 4.183 4.183 - 12.549 12.549Physical Conting. - 0.210 0.210 - 0.630 0.630Price Contingency - 0.903 0.903 - 2.709 2.709

Total - 5.296 5.296 - 15.888 15.888

-- InsulatorsBase Cost - 1.675 1.675 - 5.025 5.025Physical Conting. - 0.084 0.084 - 0.252 0.252Price Contingency - 0.362 0.362 - 1.086 1.086

Total - 2.121 2.121 - 6.363 6.363

-- Towers, Fittings &ErectionBase Cost 5.943 3.688 9.631 17.829 11.064 28.893Physical Conting. 0.296 0.186 0.482 0.888 0.558 1.446Price Contingency 1.587 0.808 2.395 4.761 2.424 7.185

Total 7.826 4.682 12.508 23.478 14.046 37.524

-- EngineeringServicesBase Cost 0.308 0.459 0.767 0.924 1.377 2.301Physical Conting. 0.016 0.024 0.040 0.048 0.072 0.120Price Contingency 0.083 0.099 0.182 0.249 0.297 0.546

Total 0.407 0.582 0.989 1.221 1.746 2.967

Total TransmissionLine Cost 8.233 12.681 20.914 24.699 38.043 62.742

c. Tota-. Project Cost

Base CostPower Station 10.217 53.038 63.255 30.651 159.114 189.765Transmission Line 5.943 9.546 15.489 17.829 28.638 46.467

Total 16.160 62.584 78.744 48.480 187.752 236.232

EngineeringServicesPower Station 0.641 1.949 2.590 1.923 5.847 7.770Transmission Line 0.308 0.459 0.767 0.924 1.377 2.301

Total 0.949 2.408 3.357 2.847 7.224 10.071

- 47 -

ANNEX 2.2Page 5 of 5

JORDAN

FIFTH POWER PROJECT

Project Cost Estimate by Contracts

Local Foreign Total Local Foreign Total-------JDT o… Miion----- -------u-s Million-----

Physical ContingencyPower Station 0.742 4.245 4.987 2.226 12.735 14.961Transmission Line 0.312 0.504 0.816 0.936 1.512 2.448

Total 1.054 4.749 5.803 3.162 14.247 17.409

Price ContingencyPower Station 2.354 13.982 16.336 7.062 41.946 49.008Transmission Line 1.670 2.172 3.842 5.010 6.516 11.526

Total 4.024 16.154 20.178 12.072 48.462 60.53q

Total Project Cost 22.187 85.895 108.082 66.561 257.685 324.246

Sunk Costs ('81)--Site Investigation 0.096 0.164 0.260 0.288 0.492 0.780

--Engineering Services 0.044 0.426 0.470 0.132 1.278 1.410Total 0.140 0.590 0.730 0.420 1.770 2.190

-17 I~~~~~~~~~

01, 11. Ii 000-. 0..1l ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~ ~~~~~~~~~~~~~~I ~N........-. ... ....

0 00111A0 II 110 100, oo,onooioss~~~~~~~~~~~~~~~~ ...... ..... . .. ... ... ..... ... ..... .... .... ..... .. ...... ... .... ..... .

00010, 0~~~~~~~~~~~~~~~~~~~'N. J

va-V .30000~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.. ................. .... ............. .................. .....

1001100,01 I ~~~~~~~~~~~~~ p -- IMO H~I

0- -X -M e

JORDANFIFTH POWER PROJECT

Transmission Line Implementation Schedule

- Disussingofrnsmwith o JEA olnesiato

aTndering Polertiod

- Renueatiodsin and prepare R eprsinm ordu---

- Contrcts discussionsrandu cwntrhc JAwr

-Design checkfcaiong of d towrs,ifoandaions, cndctor

sagssandstenswions spAcrdmesinlfin

Fiand fTtneings Dcmet

TenProces conracorsid ie

EvaMonthly and puarner pRorsreports

INPROUEECTIO DURCAING EAMNT MANRIATEMENT

- Inspe hctiongofm toerias, d ournand afterscnucomasanufatuensos pcrdmes .utto

andowe ftetings

- Inocsulatorntringterstsvoce

- Mointhl fasts atl rges eot

CONSTRUCTION AURND SQUIPMERIONT ARCTO -.I ondaetion ins-telallation an ate

-Tower trestiong

Pnsulatcheckingtad anint oe

J Pocn estscoraorinoe

MINSCELLA INEOUS UERISO

-Folowupda onisualnationfo24onsufr

commicssiconingor nvie

World Bask - 23317

- 50 -

ANNEX 2.5Page 1 of 2

JORDAN

FIFTH POWER PROJECT

Description of the Civil Works Contract Package

1. EARTIHWORK1.1 On land1.2 Off-shore

2. DEMOLITION2.1 Gabions

3. TEMPORARY WORKS3.1 Sheet Piling

3.2 Dewatering System

4. CIRCULATING WATER SYSTEM4.1 Seawater Intake Pipes4.2 Seawater Supply Pipes4.3 Seawater Discharge Pipes

5. WATER DRAINAGE SYSTEM5.1 Piping5.2 Manholes

5.3 Watercourses5.4 Oil-water separators

5.5 Transformer Pits

6. SANITARY SEWERAGE SYSTEM6.1 Piping6.2 Manholes6.3 Sanitary Treatment Plant

7. FINISHED SURFACING7.1 Roads and Parking7.2 Fine Grading7.3 Surfacing7.4 Landscaping

8. CONCRETE WORK8.1 Footings8.2 Walls8.3 Columns8.4 Slabs on Grade8.5 Elevated Slabs8.6 Blinding Concrete8.7 Precast Concrete8.8 Grouting8.9 Subgrade Dampproofing8.10 Underground Electrical Ducts8.11 Turbine Pedestal

- 51 -

ANNEX 2.5Page 2 of 2

9. STEEL WORKS9.1 Structural Steel9.2 Steel Joints9.3 Metal Deck9.4 Miscellaneous Metals

10. ELECTRICAL SERVICES10.1 Outdoor Lighting10.2 Indoor Power and Lighting service all buildings except powerhouse

10.3 Below Grade Grounding for Entire Plant

10.4 Above Grade Grounding in Subsidiary Buildings10.5 Communication Systems

I1. MISCELLANEOUS11.1 Monorail Tracks and Hoist11.2 Overhead Bridge Cranes11.3 Machine Shop Equipment11.4 Plant Mobile Equipment

11.5 Warehouse Shelves

12. FENCING

January 1982

- 52 -

ANNEX 2.6

JORDAN

FIFTH POWER PROJECT

Estimated Schedule of Disbursement

Bank Fiscal Cumulative DisbursementYear and Quarter at end of Quarter

------US$ Million-

1983

March 31, 1983 1.5June 30, 1983 3.5

1984

September 30, 1983 585December 31, 1983 8.0March 31, 1984 11.0June 30, 1984 14.0

1985

September 30, 1984 17.5December 31, 1984 19.0March 31, 1985 20.5June 30, 1985 22.0

1986

September 30, 1985 24.0December 31, 1985 26.0March 31, 1986 28.0June 30, 1986 30.0

1987

September 30, 1986 31.0December 31, 1986 32.0March 31, 1987 33.0June 30, 1987 34.0

1988

September 30, 1987 34.5December 31, 1987 35.0

April 1982

- 53 -

ANNEX 3.1

JORDAN

FIFTH POWER PROJEC"

Salaries of JEA's Staff During 1975-81(JD per month)

Occupation 1975 1976 1977 1978 1979 1980 1981

Engineer - Trainee 138 154 154 189 189 189 199Engineer - New 151 183 183 200 244 244 273Engineer with 5 YearsExperience 164 221 221 257 305 305 332

Engineer with 10 YearsExperience 196 329 329 377 433 433 452

Engineer with 15 YearsExperience 213 449 449 449 573 573 596

Accountant - New 74 81 109 109 131 140 160Accountant with 5 Years

Experience 87 93 137 137 162 171 192Accountant with 10 Years

Experience 94 102 170 170 204 213 241Accountant with 15 Years

Experience 103 115 212 212 255 263 292

Administrative Staff - New 59 81 102 102 122 131 150Administrative staff with

5 Years Experience 65 93 128 128 151 160 180Administrative staff with

10 Years Experience 74 102 159 159 190 199 225Administrative staff with

15 Years Experience 87 115 198 198 226 246 265

Clerk - New 40 47 59 59 68 77 83Clerk with 5 Years

Experience 47 56 70 70 90 99 108Clerk with 10 Years

Experience 55 60 99 99 114 123 140Clerk with 15 YearsExperience 61 66 123 123 140 147 168

Services 25 39 51 51 59 68 76

January 1982

JORDAN

FIFTH POWER PROJECT

JEA's Employee Turnover during 1978-1981

1978 1979 1980 1981

Average Average Average Average

No. of New Resig- No. of New Resig- No. of New Resig- No. of New Resig-

Employees Recruits nations Employees Recrlits nations Employees Recruits nations Employees Recruits nations

Engineers 93 19 7 102 18 7 112 14 7 116 6 9

Technicians 462 136 64 532 136 68 582 116 60 693 94 69

Accounting Staff 84 33 13 105 36 15 125 24 16 143 13 13

Administrative 330 108 60 369 132 55 516 76 29 438 41 41

and other Staff 96I9614 1,108 322 14-5 1,3-35 230 112 1,390 154 132

Turnover Ratio

1978 1979 1980 1981 1978-1981

JEA As a Whole 22.7 21.1 12.8 10.3 16.0

Engineers 14.0 12.3 9.4 6.5 10.3

Technicians 21.6 19.2 15.1 11.8 16.4

Accounting Staff 27.4 24.3 16.0 9.1 17.8

Administrative Staff 25.5 25.3 10.2 9.4 16.4

Januiary 1982(140P)

- 55 -

ANNEX 3.3

JORDAN

FIFTH POWER PROJHCT

JEA's Income Stateiment

At Current Costs(JD Thousands)

1 2 3 4 5 6 7 8 9 101978 1979 1980 1981 1982 1983 1984 1985 1986 1987

1015 INCOME STATEMENTS1020 JD THOUSAND'S10251030 GENERATION g SALES1035 STATISTICS1040 ------… ___--1065 GWH GENERATED 529 696 870 1064 1295 1493 1928 2323 2564 28811125 GWH SOLD 504 652 791 963 1174 1352 1758 2118 2338 26141130 MD SOLD-MW 85 128 149 176 213 253 333 402 446 4911155 AV REVEN FILS/KWH 13.1 13.7 22.5 23.4 26.0 27.5 31.5 31.5 31.6 31.5

4110 OPERATING REVENUES4115…4200 GWH SALES REVENUE 4384 5763 13832 17854 2 4 1 4 4 L1 29038 1

l 43463 52321 57816 646204210 MD SALES REVENIJE 2036 2827 3835 4564 6270 7896 11754 14223 15792 173944220 OTHER ELEC REVENUE 179 363 129 150 165 181 200 220 242 266

4252 TOTAL SALES REV 6599 8953 17796 22568 30579 37115 55417 66764 73850 82280

4601 OPERATING EXPENSES46024640 SALARIES 1201 1872 2620 3242 3663 4140 4679 5286 5973 67504650 FUEL 2102 2019 7205 11050 /218472 20899 27734 34328 34387 379854660 PURCHASED ENERGY 140 79 0 0 0 0 0 0 0 04680 MAINTENANCE 137 255 468 430 512 584 771 929 1025 11524690 INSURANCE ETC 156 283 433 278 355 391 460 411 523 5734700 ADMINISTRATION 189 224 273 337 407 464 615 741 818 9154950 DEFRECIATION 1565 2540 2862 3337 5708 6482 8300 8989 11186 15469

4990 TOTAL 5490 7272 13861 18674 29117 32960 42559 50684 53912 62844

5010 OPERATING INCOME 1109 1681 3935 3894 i462 4155 12858 16080 19938 194365020 OTHER INCOME NET 484 306 656 487 530 589 638 701 771 852

5030 NET INCOME ;EF INT 1593 1987 4591 4381 1992 4744 13496 16781 20709 202885040 INT CHARGED TO OFP 0 0 1107 1624 2616 2990 3012 2841 5371 7834

5060 NET INCOME 1593 1987 3484 2757 -624 1754 10484 13940 15338 12454

5110 RATE BASE 24990 36449 40749 45479 68901 90917 106008 120277 166376 2230885140 RATE OF RETURN 4.4 4.6 9.7 8.6 2.1 4.6 12.1 13.4 12.0 8.75160 OPERATING RATIO X 83 81 78 83 95 89 77 76 73 76

5301 APPLICATION OF NET5302 NET INCOME+RUR FIL5330 -LEGAL RESERVE 159 199 348 276 -62 175 1048 1394 1534 12455340 -RURAL ELEC RESER 485 609 71 909 1095 1265 1632 1978 2181 24385375 -EXPANSION RESERVE 949 1179 3065 2791 -192 1994 9833 12888 14087 11449

5477 TOTAL INTEREST 1004 1386 1582 2388 3272 4345 6185 7924 8853 9509

5479 DIRECT INTEREST 1004 1386 1582 2319 3077 4063 5886 7650 8603 92835480 LESStICC 1004 1386 475 695 461 1073 2874 4809 3232 1449

5484 INT CHARGED TO OP 0 0 1107 1624 2616 2990 3012 2841 5371 7834

5488 AMORTIZATION 974 920 2475 1471 1800 3412 3858 4108 4215 8645

/1 Includes compensation, JD 2.5 million in 1982 and JD 0.8 million in 1983 for free streetlighting and forsupply to rural consumers at less than economic cost.

/2 Net of JD 3.1 million provided to JEA as compensation for two1 fuel price increases totalling 66.5% in 1981.

April 1982

-56 -

ANNEX 3.4

JORDAN

FIFTH POWER PROJECT

JEA's Waa.a=e Sheets

At Current Costs(3D Thousands)

I 2 3 4 zi 6 ?' 8 9 11978 1979 1980 1981 198 B2 1983 1984 1985 1.9180 1.98/

751.0 BAL.ANCE SEt2 5 15 II' VNII'ANOiI752021540) AS'i F I'

7560 F I-ANT IIN OPBERAT ION 3 6 8801 4641,1j 52675 66344 J.1153 1.8 1.2< 9 ?021 16c,uOJ I. 80e86o i8, :'t.757 0 L.FSS4 D LEPRECIATLI N 3 23~4 5 70(5 8644 1:1 981 1 .8.73 7 2 6 7 37038 48897~ 6 2 6 A

2 5 80 NET FLA-(NT 3364/ 40746 44031 54363 96581 1.03231. 12.8906 13'1969 221 3e 5'

7600 WORK IN FRUOGRLE :S 6216 4'11 19 18098 34794 1.50721 4/7877/4 29 10705 '4. 4.1 31 ,184

761.8 1 /Tt NVES'MFENI 5 4431 4 7 23 48o2 11 .2 91 13767 1 481.3 111573 121S3 IIW.y 9i4

2 62',5 CURRENT AS5'ETS'7627.2630 CASH BANK," 24 89 52.94 8110 3100 2200 2 6 50 3500 370 ., *,' 40007631 T'EMP'ORARY SIJRF' 6 0 0 0 0 Q 0111 7637 ACCO U lNTS1. R,EC -ELEC 14u66 2 0 32 2 6 00 282 1 3822. 4639 692 H 83 4 5 11). I 83,-7633 OUTNER [I' 4 1 'i07 1724 1129 1377 141i 21 ' ,2 . 1 9 c

6 35 [NVI N I COR I ES 19'2 3 ~649I 4440 45 50 61 6 2. /326 / 141I 9;,3 6 1 i4 141 I. Li /62640 FNI::TPAYME N I S 1.1 C, / 1932 4495 3900 2.800 800 4(Ouu 3 9f- / ''07

7670 TOT IAl 4 i 1 6614 2 1 419 15500 17061. 16899 0q55~2. ,~4L

7)690 TOTDIAL, 5170 66'02 88410 I11594 8 J.4 2'4i8 A 18'2 72/' 4 1. 9'28042' 31 F438 32'R'45

7710) I TIAS.I ITI ES

7730 ELOUT T9

27/')C PI 1101, 23 2815 30 312 35,4 4 1 illi 5AS 3~9/. 4 0 81J5 40815 luhi', 4 Q8J1. 4 'Ob '17280 RE 0181I' E:ARNINGS 1560 2031 5303 8094'i /902. 98a9 6 .19/29 326i7 46/04 5' 81 78/0 EMP 'T ERM RESERVE 289 491 6 65 874 8714 8/4 87 4 874 a8/ +4 8/4791<) 1&EGAL RFSER'VE 768 967 1315 1591. 1 5 29 1704 2752 41i4 6 5 6 o" 6 9 2'5'9' RURAL. EL EC RESERVE. 82 431 2 16.5 3074 4 169 54i 76 9044 Ii I 2 156 5-

7985 REVAL.UATION RES3ERV 0 0 0 41.7 12 2.42 20(2 42 60 3) 815 53203

7 9 9 5 IOT IAL- 26724 35232 44889 5 2 148 392.103 70965 9J. 4/11 J 11 77'33 1.4 41 i 1.11I/3633

83002 L08N:; IEM LII EiLET8003 - _ .. . .81004 LIT D.-B-1-DIREC I 16257 201568 2~ 65 41i547 52824 68s54 1'~ 00843 1.1. 661,4 1 26 1. 89 11969483006 L./T t'EIT--RELENV 4510 4024 311j72 71447 10746 1.21.29 109?62. 9?795 8675 7555

8010 L./T DEBI TOTAL- 20807 _24642' 31337 49394 6,3570 11O062 J. i118(15 1 264 09 134864 1.2 724 9

8030 l;UR''N LIABIL-ITIES

8040 0fFCUUNS lP AYA'L.E. 2.079 35032 4650) 362J.1 4

54

1 31662. 83 31 JQ105 /8L I 5.0 .25 8050 -CUSTOMER DEFOSTITS 170 66 103 31.3 '. 4 18 416 458I 54 ',. 48055 RET MO0E1 /DUE 1-YR 1432 1342. 736 622. 1 SI '.6 4 ' 60 5 03 25j3'5 2 ~ 1. ~ 18070 -OVERDRAFTS 0 0 0 0 542 1 9 98304-l 2/1611 Q

8090 T'OTAL 3681 4440 54839 4556 6201 J.1 u7 2 1 9080 16287 .12- Iy ~13u118108 C ONSUMER CONTRIBLUT 4510 1496 3729 5204 /9%?1 10059 101.39 10239 10359 10439811 I0 L./I RET MONEY 88 392 2966 4646 55/3 497/9 93838 9755ll 1 19 ?j1 4413

9100 T OTAL 51750 66202 8841.0 115948 1.4'2 4 8 6 >4 172 2890 2 8 04z il3 54 38 18/7415

9204 DIRECT DEBT9206 ASZOF DIR DEBTiEG 38 3/ 38 44 A? 49 52A7 49220 DEBT/DEBT & EQUITY 44 41 41 .49 5 ~ 5 ' * '9230 CURRENT RATio 2.0 3.! 3.9 3.4 2s 1.1 .. 3 J. 39240 RECEIVABLEj-S/REV 1 23 23 15 13 J. 1 1. 1239245 RECEIVABLES-DAYS 81 82 5 3 45 45 4,4. 411 49280 ANNUAoL REVAL UATiODN 0,00 0.00 0.00 0.00 *'I7 . 5 7., I/71 6.1( 65

/I Assumed that the Government will provide a medium-term financing by deferring the collection of debt servicepayments due in 1983 through 1985.

April 1982

-57 -

ANNEX 3.5

JORDAN

FIFTP POWER PROJECT

JEA's Sources and Applications of lwAAtttxrnt Costs

(JD ThoueandsY

1 2 3 4 5 6 7 8 9 101978 1979 1980 1981 .982 1983 1984 1985 1986 198/

6001 SOJURIE AND USES6002 OF F:UNDS6005 J1D IHOU!iANDS60076010 INIERNAL SOURCES6020 -NLT INCOME BEF IN 1593 1987 4591 4381 1992 4;744 13496 16781 20/09 .o u6030 -DEFRECIATION 1565 2540 2862 3337 5708 6482 8300 8989 111.16 J`111696040 -CONSUMER CONTR1B 450 1046 2233 1475 ?735 2100 100 100 100 1006041 RESFRVE/DEFRN ADJ -2/ -777 947 0 0 0 0 0 0 06043 -RURAL FILS - 0 0 0 909 1095 1265 1632 19/8 !181 24386045 -INVESTMENT!i 768 0 0 0 0 0 1240 1420 1263 1(0966047 -RELENT LOAN INT 0 0 0 379 565 697 696 616 533 466

6060 TOTAL 4349 4796 1063;3 10481 12095 15288 25464 29084 35972 398,/

6080 OPERATIONAL RE-6081 QUIREMENTS6100 -DEBT SERVICE6102 RE DIRECT LOANS 1716 1830 3555 3363 4320 6608 8577 10591 11698 168086104 RE RELENT LOANS 262 476 502 496 752 1149 1466 1441 1370 i34d.

6106 TOTAL 1978 2306 4057 3859 5072 /757 10043 12032 13068 18154

6109 NEI INTERNAL CASH6110 GENERATION 2371 2490 6576 6622 7023 7531 15421 17852 22904 21 03

6115 LESS:L/T RETENTION6120 MONEY TRANSFERS -88 -304 -2574 -1680 -927 594 -- 4409 -367 -. 218 7560

6158 -WORKING CAPITAL -2047 8399 3756 -4986 -84 -4564 9379 50 9587 87

6160 NET AVAILABLE6170 FROM OPERATIONS 4506 -5605 5394 13_88 B034 11501 10451 18.169 1 i53F5 14056

6190 CONSTRUCTION6191 REQUIREMENTS6200 -ONGOING WORKS 16146 6087 19728 2787/ 14969 12350 4000 2000 0 u

6210 -FIFTH FOWER PRtlJ 0 0 0 730 550' 20263 38968 2476/ 18575 06220 -FUTURE PROJECT 0 0 0 0 1000 3000 5000 1000 1500 120006230 -MISC PROJ 0 0 0 F550 950 1050 1150 1250 3350 36506240 -EXP t;APTTALIZED 0 0 0 513 5t,3 621 682 750 750 7506290 L/7 INVESTMENTS /2 0 292 139 6429 247t. 1046 0 O 0 0

6295 IOTAL 16146 6379 19867 36099 25467 38330 4Y800 2976; _41/7 1640G

6310 BALANCE TO FINANCE 11640 11984 144/3 22811 17433 26829 39349 11598 8640 2344

6330 FINANCED BY:6340 IDA CREriITS 517 358 466 0 0 0 0 0 0 06350 IBRD LOANS 0 0 555 2617 2053 908 0 0 0 06360 OTHER LOANS 6273 4397 8149 12209 6063 935 0 0 0 06370 RELENDING LOANS 225 0 0 4702 3456 2250 0 0 0 06375 THE PROJECT LOANS6380 IBRS O 0 0 0 0 2667 3666 2334 2000 10006381 OTHER COFINANCIERS 0 0 0 0 4132 12530 25560 16241 10670 06384 FUTURE FROJ LOANS O 0 0 0 272 1224 5765 137 0 306410 EQUITY 4547 7027 5129 3074 1457 843 0 0 0 06420 EMP TER RESERVE 78 202 174 209 0 0 0 0 0 0

6460 TOTAL 11640 11984 14473 22811 17433 21357 34991 18712 12t670 1030

6575 StJRPLUSI DEFICII)6380 OF FUNIDS 0 0 0 0 0 -54/2 /3 -4358/3 7114 4030 '-13146600 ACCUMULATED 0 0 0 0 0 -5472 -9830 -2/1I 1314 0

6750 DEBT SERVICE COVER 2.2 2.1 2.6 2.7 2.4 2.0 2.5 2.5 2.8 2.26753 SELF FINANCING(%) 29 22 51 27 27 25> 35 45 65 1076754 AVERAGE 7 TARIFF6755 INCREASE RtUD 0.00 0.00 0.00 0.00 0.00 20.00 13.00 u.00 0.00 0.0

/1 The rural fils collected would be divided later between JEA and tCe two concessionaires. The allocations wouldbe proportional to the Rural Electrification program in the respe:tive areas.

/2 The net investments during 1982-87 includes the net disbursements relating to relending operations./3 Assumed that the Government will provide a medium-term financing ,y deferring the collection of debt service

payments due in 1983 through 1984.

April 1982

- 58 -

ANNEX 3.6Page 1 of 4

JORDAN

FIFTH POWER PROJECT

JORDAN ELECTRICITY AUTHORITY

Notes and Assumptions for Financial Forecasts

I. General

1. All financial forecasts are given for the fiscal years of JEAbeginning January 1 and ending December 31. In addition to its powerutility operations, JEA is engaged in pole manufacturing, in relending ofthe foreign loans to the distribution companies, JEPCO and IDECO, and in astaff housing program. JEA's pole operations are designed to break even.The earnings from the relending operations are not to be used for JEA'soperating expenses and will have to be transferred to its expansionreserve. All non-electric operations, such as the relending and polemanufacturing operations, are summarized and indicated as long-terminvestments in the financial statements (Annex 3.3 through 3.5).

II. Income Statements

2. Sales of Electricity are based on information furnished by JEA asmodified in the Bank. The forecasts assume annual kWh sales growth of21.7% in 1981, 21.9% in 1982, 15.2% in 1983, 30.0% in 1984, 20.5% in 1985,10.4% in 1986 and 11.8% in 1987 and annual maximum demand (MW) growth of18.1% in 1981, 21.0% in 1982, 18.8% in 1983, 31.6% in 1984, 20.7% in 1985,10.9% in 1986 and 10.1% in 1987.

3. Average Revenue per kWh for 1981 is based on the average revenueper kWh after the tariff increase from February 6, 1980. The followingtariff increases to comply with the cash generation covenant 1/ under Loan1986-JO of June 1981 are assumed; 20% not later than May 1, 1983, and 13.0%in January 1984.

4. Maintenance Charges are assumed to increase by the samepercentages as annual kWh generation of electricity.

5. Other Operating Revenues are assumed to increase 10% per annum.

6. Fuel and Lubricants are based on estimates of generation fromsteam units and combustion turbines using fuel prices, specific fuelconsumption and plant mix as follows:

1/ It is assumed that the Government would provide JD 2.5 million in 1982and JD 0.8 million in 1983 to compensate for the supply of electricityfree of charge for street lighting and at less than the economic costfor the rural consumers.

- 59 -

ANNEX 3.6Page 2 of 4

Fuel Prices

Heavy Fuel Oil Diesel OilDelivery Points JD/Ton JD/ton

1. Hussein Thermal Power Station 50 672. Marqa, Karak and Mla'an Power Stations 50 673. Aqaha Power Station 50 67

Heavy Fuel Oil Diesel OilSpecific Fuel Consumptions Gram/kWh Gram/kWh

1. Gas Turbine Units - Up to 1984 3702. - After 1984 3503. Diesel Units - Marqa 225 154. - Aqaba 200 355. Steam Units - 33 MW 3006. - 66 MW 2707. - 130 MW (Aqaba) 2308. Ma'an - 2859. Karak 223 12

Plant Mix (% Generation)

Year Steam Gas Diesel

1981 75 7 181982 80 4 161983 84 4 121984 82 6 121985 80 10 101996 95 51987 95 5

Current tariffs include a fuel adjustment: clause for passing on the fuelcost increases to customers.

7. Salaries and Wages are based on JEA's 1981 salaries and wagesescalated by 13% each year (2% for staff increases, 5% for general salaryincreases and 6% for inflation adjustmen-s).

8. Asset insurances etc. are assumed to increase in proportion to theincrease in gross fixed assets in service.

0. Administrative expenses are assumed to increase by the samepercentage as annual kWh generation of electricity.

- 60 - ANNEX 3.6

Page 3 of 4

10. Depreciation rates assumed are as follows:

GenerationHussein Thermal Power Station - Steam 4.0%

- Gas Turbine 6.7%Marqa Power Station 10.0%Aqaba Power Station - Stages I & II 6.7%

- Steam 4.0%Karak Power Station 6.7%Ma'an Power Station 6.7%

TransmissionAll Transmission Lines & Equipment 4.0%

DistributionAll Distribution Related Items 4.0%

AdministrationAll Buildings, Stores and Workshops 2.5%All Other Capital Expenses 10.0%

ll. Non-Operating income includes projected income from pole plantoperations and other investment income based on JEA's forecasts.

12. Income Tax - JEA's income is not taxable.

III. Balance Sheet

13. Gross Fixed Assets in Service are carried by JEA at historicalcosts. However, for purposes of analyses the forecast has been made atcurrent costs (assets revalued from original year of construction assumingappropriate indices for inflation).

14. Inventories assume a month's fuel plus about 5% of gross fixedassets for spare parts and inventories of maintenance items.

15. Accounts Receivable - Electricity. The forecasts assumereceivables to be the equivalent of six weeks' electricity sales.

16. Accounts Receivable - Other includes receivables from; (i) poleplant operations; (ii) JEA's investments in banks and shares; and (iii)relending interest.

17. Prepayments, etc. are assumed to be 5% of the work in progressplus 10% of administrative expenses including asset insurance etc.

18. Capital includes Government equity contributions to JEA without

any formal obligation of repayment.

- 61 - ANNEX 3.6

Page 4 of 4

19. Customer Contributions - JEA requires that consumers pay certainportion of the cost of expansion of its system to serve the consumer. Theprojections include large contributions from the Arab Potash Co. and fromthe Phosphate Works.

20. Reserves

(i) Expansion Reserve - Balance of net income after reserverequirement plus net income from relending operations.

(ii) Legal Reserve - 10% of net income.

(iii) Rural Electrification Reserve - "Rural Fils" collected bylevy of Fils l/kWh on all final consumers to provide capitalfor commercially unattractive rural electrification projects.

(iv) Termination Reserve - One month's salarv equivalent to meetthe severance pay for employees retired based on years ofservice of the employee. Under the new regulations, theamount payable by JEA will be 9% of the wages and salariesand will he administered by the Corporation for SocialSecurity Administration.

21. Accounts Payable includes one month's fuel costs, purchased energycosts, materials, and interest payable.

2.2. Customer Deposits are assumed to increase at 10% per annum.

23. L/T Retention Monies (a long-term liabicility) are assumed to bethe equivalent of 10% of work in progress to be paid after the expiry ofthe Guarantee period (i.e. usually one year).

IV. Sources and Applications of Funds

24. Borrowings. All foreign borrowings are converted to Jordan Dinarsat the rate of US$l = JD 0.3. JEA's planned borrowing program has beenadjusted to meet the needs of the construction program as revised by theBank and taking into account JEA's internal cash generation.

25. Construction Requirements are based on JEA's estimate as revisedby the Bank and escalated using the following pe^_centages for pricecontingencies corresponding to expected conditio-is in Jordan.

1982 1983-85 1986-87Equipment and Civil Works 8.75 7.75 6.5

26. Amortization of Long-Term Debt. Amortization of existing andfuture foreign loans is based on information provided by JEA.

- 62 -ANNEX 4.1

JORDAN

FIFTH POWER PROJECT

Load Forecast(1981-1995)

Year Sales Losses /1 Total Peak Load /2

(GWh) (GWh) TGWh) -MW

1981 963 101 1,064 194

1982 1,174 121 1,295 242

1q83 1,352 145 1,497 286

1984 1,758 170 1,928 387

195 2,118 205 2,323 461

1986 2,338 226 2,564 522

l987 2,614 267 2,881 574

1988 2,849 276 3,125 621

1989 3,130 303 3,433 677

1990 3,475 337 3,812 736

1991 4,240 411 4,651 873

1992 4,520 439 4,959 935

1993 4,844 471 5,315 1,000

1994 5,177 504 5,651 1,073

1995 5,535 538 6,073 1,145

/1 Network and station losses.

/2 Interconnected system.

January 1982

JORDAN

FIFTH POWER P1OJECT

Return on Investments(Feel Cost Fs-sletifo 3, p...)

------------------------------ --- ---------------- COSTS J0'O00 -----------------------------------------------Tntel Total DOrpet of Project Tote1SysLen Displsee.e. tL Finl ----- -- O- & M------Fool Be-.s.e NetRequir-d Neo of soe ------- Inet-t 1-------- 11.2 Tra....i n 6 Fe I otel revenu Sle Fel 8s-ings Total NetYesr Onoerstion teed Existing Fleets Generation TrDsoisision Oistnibseino Total File/kWh Ceneratiou Distribsti-n 06M Cost Isles 35 Fils/kwh 3.5 Fils/sWh, Benefits Benefits(0558) (01db) (080) Ill ef I.C.)(I) (7(2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18)

1981 730 730 730 - 7301982 4,441 870 5,311 5,311 - 5,3111983 12,974 S,089 18,063 18,063 -18,0631984 27,047 5,089 32,136 32,136 -32,1361985 2,323 14,717 4,301 19,018 19,018 -19,0181986 2,564 241 1,040 11,653 1,723 396 13,772 3,213 737 170 4,120 17,892 198 6,930 4,220 11,150 - 6,7421987 2,881 558 1,400 916 916 7,662 927 170 8,759 9,675 458 16,030 5,851 21,881 12,20619ff 3,125 I00 1,156 1,316 1,316 11,343 1,073 170 12,586 13,902 658 23,030 4,976 28,006 14,1041989 3,433 1,110 848 1,820 1,820 16,170 1,258 170 17,598 19,418 910 31,850 3,760 35,610 16,1921990 3,812 1,366 2,240 2,240 20,497 1,412 170 22,079 24,319 1,120 39,200 39,200 14,8811991 4,651 1,500 2,460 2,460 22,507 1,492 170 24,169 26,629 1,230 43 050 43.050 16,4211992 4,959 1,000 1,640 1,640 15,005 1,192 170 16,367 18,007 820 28,700 - 28,700 10,6931993 5,315 1,100 1,804 1,804 16,505 1,252 170 17,927 19,488 902 31,570 31.570 11,8391994 5,681 1, 200 1, 968 1,968 18 ,006 1,312 170 19 ,488 21, 46 984 34,440 34,440 12,9841995 6,073 1,200 1,968 1,968 18,006 1,312 170 19,488 21.456 984 34,440 34,440 17,9841996 6,449 800 1,312 1,312 12,004 1,072 170 13,264 14,558 656 22.960 22,960 8,4021997 6,778 850 1,394 1,394 12,754 1,102 170 14,026 15,420 697 24,395 24,395 8,9751998 7,131 900 1,4476 176 13 504 1,132 170 14,806 16,282 738 25,830 25,830 9,5481999 7.504 950 1.558 1,558 14.255 1,162 170 15.587 17,145 779 27,265 27,265 10,1202000 7,573 600 904 984 9,003 952 170 10,125 11,189 492 17,220 17,220 6,1112001 ?- 2

2002

20032004

2005

2000

20082009 2010 600 984 984 9,003 952 170 10,125 11,109 492 17,220 17,220 6,111

IRR 10.384

Noto: Details of c-l-uletions for ouch column -re .. eSluble is the Projent File.

Oct.b-r 1981 0

JORDAN

FIFTR POWER PROJECT

Return on Investments(Fuel Cost E-clation 3T p.a.)

------------------------------------------------- COSTS JO'OOO ------------------------------------------------

Totlo Total Output of Project Toto1

Syste Diplace t F ------------ O & m---------- Fuel Reue Net

Required New of soe of ------- Invet t-------- 11.2 Transmission - t Totl from Sales Fuel S-visgs Petal Net

YPor Pe-eration Lx,d R.istie. Plaste pemerstion Trnes .. sios Dietribution Total Fil/kWh G--eneratio- Distribution 06W Cot al.es 35 File/LWh 3.5 Fil./kWb BNeeefit. Semefita

(p8) (CWlh) (pm,) (1%of .C.(1) t2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17) (18)

1981 730 730 730 - 730

1982 4,441 870 5,311 5,311 - 5,311

1983 12,974 5,089 18,063 18,063 -18,063

1984 27,047 5,089 32,136 32,136 -32,136

1985 2,323 14,717 4,301 19.018 19,018 -19,018

1986 2,564 241 1,040 11,653 1,723 396 13,772 2,772 737 170 3,679 17,892 198 6,930 3,640 10,570 - 6,742

1987 2,881 558 1,400 916 916 6,417 927 170 7,514 8,430 458 16,030 4,900 20,930 12,500

1988 3.125 802 1,156 1,316 1,316 9,223 1,073 170 10,466 11,782 658 23,030 4,046 27,076 15,294

1989 3,433 1,110 848 1,820 1,820 12,765 1,258 170 14,193 16,013 910 31,850 2,968 34,818 18,805

1990 3,012 1,366 2,240 2.240 15,709 1,412 170 17,291 19,531 1,120 39,200 39,200 19,669

1991 4,651 1,500 2,460 2.460 17,250 1:492 170 10,912 21,372 1,230 43,050 43,050 21.678

1992 4,959 1,000 1,640 1,640 11,500 1,192 170 12,862 14,502 820 28,700 28,700 14,198

1993 5,315 1,100 1,804 1,004 12,650 1,252 170 14,072 15,876 902 31,570 31,570 15,694

1994 5.681 1,200 1,968 1,968 13,800 1,312 170 15,282 17,250 984 34,440 34,440 17,196

1995 6,073 1,200 1,968 1,968 13,800 1,312 170 15,202 17,250 984 34,440 34,440 17,196

1996 6,449 800 1,312 1,312 9,200 1.072 170 10,442 11,754 656 22,960 22,960 11,206

1997 6,770 850 1,394 1,394 9,775 1,102 170 11,047 12,441 697 24,395 24,395 11,954

1998 7,131 900 1,476 1,476 10,350 1,132 170 11,652 13,128 738 25,830 25,830 12.702

1999 7.504 950 1,558 1,558 10,925 1,162 170 12,257 13,815 779 27,265 27,265 13,450

2000 7 ,573 600 904 904 6,900 952 170 8,022 9,006 492 17,220 17,220 8,214

2001

2003

20042005

2006

2007

2008

20092010 600 984 984 6,900 952 170 8,022 9,006 492 17,220 17,220 8,214

IRR = 1.3,218

Notei DOtoils of c-lculoti... for each colons are available in the Project Fil.

October 1981

- 65-ANNEX 5.1

JORDAN

FIFTH POWER PROJECT

Selected Documents Available in the Project File

1. Feasibility Studies and Design Memorandum for Jordan ElectricityAuthority - Aqaba Thermal Power Station, Stage 1 (five volumes),Chas T. Main International, Inc., USA, Fetruary-September 1981.

2. Aqaba Thermal Power Station, Stage 1, Turbine Generator Island,Tender 1/82, September 1981.

3. Aqaba-Amman EHV Transmission Study, Preece, Cardew and Rider, UK,May 1981.

4. Annual Report 1980, Jordan Electricity Aut:hority, 1981.

5. Fifth Power Project, Cost Estimate, Proiec.t Schedule, Statistical Tables,Jordan Electricity Authority, September l1l81.

6. Load Forecast for the Interconnected System in Jordan (1981-2000),Jordan Electricity Authority, August 1981.

7. Survey of Energy Utilization in Jordan, Jordan Electricity Authority,September 1981.

8. Economic Cost/Benefits Analysis for Stage 1 of the Aqaba Thermal PowerStation together with Stage 1 of the 400 1:V Amman-Aqaba TransmissionLine, September 1981.

9. Jordan Electricity Authority Financial Analysis 1980-1990, September 1981.

10. Fifth Power Pro ect - Financial Tables, Jordan Electricity Authority,September 1981.

11. Jordanian Options for Conventional Energy Supply (Coal Import),Pope, Evans and Robbins, Inc., USA, June :L981.

12. Appraisal Mission Working Papers, 1981.

October 1981

BRD 16092NOVENBER 1981

360

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IBRD 16093

4tEAN`ON/ 1 SYRIAN 3 NOVEMBER 1981

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FIFTH POWER PROJECTAQABA POWER STATION LAYOUT

- -- Property Line of Proposed Power Station

Power Station Area

Plant Facilities Proposed Under First Stage of Proiect

Plant Facilities Proposed Under Subsequent Project Stages

// - ------- Proposed Oil Supply Lines (Project)

/ / --- ~- Proposed Oil Supply Lines (Non-prolect)

/ // - -- Water Supply Lines Proposed Under First SEage of Project

/ 1 -- -- ---- - Water Supply Lines Proposed Under Subsequent Project Stages

( | - - -- Transmission Lines Proposed Under First Stage of Project

/ - - .-- Transmission Lines Proposed Under Subsequent Project Stages

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