AMMAN –– Overall US aid to Jordan this year is expected to amount to more than $700 million, including the economic assistance announced last week by President Barack Obama, a senior official said on Sunday.

Elaborating on the details of the aid package, Minister of Planning and International Cooperation Jafar Hassan said it consists of several aspects that include $250 million in loan guarantees, amounting to 70 per cent of the overall amount of the loans, to provide funding to small- and medium-sized enterprises (SMEs) across the country.

“SMEs will be able to provide local banks with guarantees worth only 30 per cent of the loan, while before banks used to ask for 100 per cent and sometimes 120 per cent guarantees of the loan value,” he said during a meeting with journalists yesterday.

This assistance will “remarkably” reduce the interest rate for borrowers and will have a direct impact on Jordanians this year, Hassan stressed, adding that beneficiaries will receive technical assistance related to feasibility studies and marketing, while banks will also receive technical assistance on how to deal with such loans under the package.

He noted that the ministry is going to hold talks with the International Finance Corporation, a World Bank member that provides finance and advice for private sector ventures and projects in developing countries, to obtain an additional $100 million in loan guarantees for SMEs in order to raise the guarantee ceiling to over 80 per cent of the loan value.

The funds for loan guarantees will help operating projects expand their businesses through accessing low-cost capital and also help create more employment opportunities for Jordanians, the minister said, adding the funds will also enable new projects to obtain easy finance with encouraging borrowing options.

“Banks will be able to use the available liquidity without risks to boost the economy at this particular moment as the country is in dire need of an injection of projects to stimulate the economy,” Hassan said.

He referred to an additional USAID grant worth $50 million to cover any additional costs on the loans, noting that part of the grant will be directed to encourage projects in the governorates.

According to the minister, the loans will range between JD3,000 to JD1 million for each project with a grace period of three years and a five- to 10-year maturity period.

The programme to support small and medium projects in the governorates will start before the end of this summer and will be implemented by the ministries of planning and industry, the Jordan Enterprise Development Corporation, the Jordan Banks Association and the Development and Employment Fund.

Citing another aspect of the US economic assistance, Hassan said financial support to the state budget increased from 45 per cent to 52 per cent of the regular US aid, which is $360 million, which means it will go up by $25 million this year.

Hassan also referred to the 50,000 metric tonnes of wheat that the US will provide to Jordan, noting that its value is $16 million.

He also revealed that the government and the US administration are discussing means of financing mega-projects in Jordan without impacting the Kingdom’s public debt levels by encouraging the US private sector to finance these schemes through soft development loans to lower the cost of the required capital.

The minister remarked that the US administration helped organise Saturday’s Jordan-US Business Forum, which His Majesty King Abdullah inaugurated with the participation of a large number of directors and representatives of major US firms.

“The forum sent a clear message from the administration, as well as the businesspeople, that Jordan is a good country for investments as it enjoys stability and qualified human resources,” Hassan said, emphasising that the Kingdom’s stability should be promoted to attract regional and international investments.