US approves funds for Jordan's water desalination project

Jordan will receive new US-backed financing to advance a planned $6 billion national seawater desalination project, as the US International Development Finance Corporation (DFC) approved investments to support construction, operation and maintenance of a major plant and conveyance system on the Gulf of Aqaba. The move includes a loan for the National Carrier Project Company and political-risk insurance for equity investors Meridiam and Suez, part of more than $8 billion in new DFC investments announced for Jordan, Africa and Ukraine.

“Enabling Jordan’s long-term water security by expanding access to new water resources will support economic growth, expand regional connectivity and enhance stability for a key US ally,” the DFC said in its statement.

The desalination plant, to be built on Jordan’s Red Sea coast, is designed to produce 300 million cubic metres of water annually and is expected to supply almost 40% of the country’s drinking water needs. The project has moved through several recent funding and legal milestones: the Jordanian government signed the final technical and legal agreement for the plant in April, a $203 million US grant for the project was announced in March, and in July Jordan’s cabinet approved $97 million in funding from the French Development Agency.

No specific loan amount from the DFC was disclosed. The agency’s package comprises a loan to the National Carrier Project Company plus political-risk insurance for the project’s equity backers, Meridiam and Suez — international infrastructure and utilities investors that will advance the construction, operation and maintenance phases.

Jordan faces acute water scarcity: UNICEF has identified the country as one of the most water-scarce in the world. The desalination and conveyance project aims to address that gap by tapping Red Sea seawater and delivering treated water inland through new infrastructure, reducing reliance on dwindling groundwater and cross-border water transfers.

• Project cost: $6 billion (national desalination project)
• Annual output: 300 million cubic metres of desalinated water
• Share of drinking water supply: almost 40%
• Recent public funding steps: $203 million US grant (March), $97 million from the French Development Agency (July)
• Operational target: expected to begin operations in 2030

Stakeholders view the DFC support as a pivotal enabler for reaching financial close and mobilising further private and multilateral capital. The combination of a loan instrument and political-risk insurance is intended to de-risk the large-scale infrastructure investment and attract long-term equity participation from firms such as Meridiam and Suez.

Looking ahead, the project’s ability to meet its 2030 operational target will depend on completing remaining financing, finalising construction contracts and securing regional conveyance permissions. If delivered on schedule, the plant would materially change Jordan’s water profile by delivering nearly 40% of potable supply and potentially bolstering economic stability and regional connectivity. Officials and investors will now focus on closing outstanding funding gaps and beginning on-the-ground works that will transform the Gulf of Aqaba site into a strategic water resource for Jordan.