A troubled new power plant leaves Jordan in debt to China, raising concerns over Beijing’s influence

0
166

ATTARAT, Jordan: 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.

 

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. Deals surrounding the plant put Jordan on the hook for billions of dollars in debt to China — all for a plant that is no longer needed for its energy, because of other agreements made since the project’s conception.

 

The result is fueling tensions between China and Jordan and causing grief for the Jordanian government as it tries to contest the deal in an international legal battle. As Chinese influence grows in the Middle East and America 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.

 

“Attarat is a representation of what the Belt and Road Initiative was and has become,” said Jesse Marks, a nonresident fellow at the Washington-based Stimson Center, referring to China’s scheme to build global infrastructure and boost Beijing’s political sway.

 

“Jordan evolves as an interesting case study not for China’s success in the region but for how China engages in middle-income countries,” he said.

 

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.

 

Laborers flown from rural China toil in the shadow of the giant station, some 100 kilometers (60 miles) south of Amman.

 

When Shi Changqing arrived in the Jordanian desert earlier this year from the Jilin province in China’s northeast, fears were mounting in the workers’ dormitories that the project could grind to a halt, leaving everyone in the lurch, the 36-year-old welder said.

 

“It’s very strange to feel that, being from China, you are not wanted here,” he said.

 

With its meager natural resources in a region awash with oil and gas, Jordan seemed to have drawn a losing ticket. Then in the 2000s, it 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 Company proposed to the government to extract shale oil from the desert and build a plant using it to provide 15% of the country’s electricity supply. The proposal fit the government’s intensifying desire for energy self-sufficiency amid the turmoil of the 2011 Arab uprisings, company officials say.

 

But extraction proved expensive, risky and technologically challenging. As the project lagged, Jordan struck a $15 billion agreement to import vast amounts of natural gas at competitive prices from Israel in 2014. Interest in Attarat waned.

 

Attarat Power Co. board member Mohammed Maaitah said he pitched the project the world over — from the United States and Europe to Japan and South Korea. No one bit, he said.

 

To Jordan’s surprise, Chinese banks offered Jordan over $1.6 billion in loans to finance the plant in 2017. A Chinese state-owned firm, Guangdong Energy Group, bought a 45% stake in the Attarat Power Co., turning the white elephant into the largest private enterprise to come out of President Xi Jinping’s Belt and Road Initiative outside China, according to the company.

 

Guangdong Energy Group did not respond to requests for comment.

LEAVE A REPLY

Please enter your comment!
Please enter your name here