Renegotiation

The Project Company initiated a renegotiation of the PPP contract three years after financial close to address various scope changes and the acceleration of the stage two development. As part of the renegotiation settlement, the parties agreed that the Procuring Authority is to contribute USD $50 million and the Project Company is to take USD $150 million in additional debt. The contribution from the Procuring Authority was structured as 10 voluntary quarterly deductions from the annual investment fees. As for the loans, the lenders decided to refinance the original debt by both increasing the amount of loan and changing the interest rate. The original loan was already four years old and was priced on the basis of a different risk profile, thus a review of the rate and the loan tenor was done to reflect the changed risk profile. It was therefore possible for the Project Company to take on the additional debt and receive more attractive financing terms. This was also helped by the fact there was an increase in the expected revenue due to the early delivery of stage two.

The government contribution required the approval of the Council of Ministers, which is the Ultimate Administrative Body in the Jordanian government. The recommendation for the contribution was submitted by the PMU to a steering committee formed for the project, which elevated the request to the Council of Ministers.