Jordan Furious Over China's High Interest Loan For White Elephant Power Plant

Jordan’s Attarat power plant was envisioned as a landmark project promising to provide the desert kingdom with a major source of energy while solidifying its relations with China.

Photo Insert: Guangdong Energy Group, bought a 45% stake in the Attarat Power Co., turning the white elephant into the largest private enterprise for President Xi Jinping’s Belt and Road Initiative (BRI) outside China.

But weeks after its official opening, the site, a sea of black, crumbly rock in the barren desert south of Jordan’s capital, is instead a source of heated controversy, Isabel Debre reported for the Associated Press (AP).

Deals surrounding the plant put Jordan on the hook for at least $1.6 billion debt to China — all for a plant that is no longer needed as Jordan has access to cheaper energy.

The result is fueling tensions between China and Jordan and causing grief for Amman as it tries to contest the deal in an international legal battle.

As Chinese influence grows in the Middle East and the US withdraws, the $2.1 billion shale oil station has come to characterize China’s wider model that has burdened many Asian and African states with crippling debt and served as a cautionary tale for the region.

In the 2000s, Jordan struck shale oil trapped in the black rock that underlies the country.

With the fourth-largest concentration of shale oil in the world, Jordan had high hopes for a big pay-off. In 2012, the Jordanian Attarat Power Co. proposed to extract shale oil from the desert and build a plant using it to provide 15% of the country’s electricity.

But extraction proved expensive, risky and technologically challenging. Chinese banks offered Jordan over $1.6 billion in loans to finance the plant in 2017.

Guangdong Energy Group, bought a 45% stake in the Attarat Power Co., turning the white elephant into the largest private enterprise for President Xi Jinping’s Belt and Road Initiative (BRI) outside China.

“Attarat is a representation of what the Belt and Road Initiative (BRI) was and has become,” said Jesse Marks, a nonresident fellow at the Washington-based Stimson Center.

First conceived some 15 years ago as a way to fulfill national ambitions of energy independence, the Attarat shale oil plant is now causing anger in Jordan because of its enormous price tag. If the original agreement holds, Jordan would have to pay China a staggering $8.4 billion over 30 years to buy the electricity generated by the plant.

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