In 2019, AFD and KfW carried out a joint interim evaluation so that the German government, AFD and the Jordanian government would be able to substantiate future cooperation concerning Sector Policy Loans in the water sector based on these evaluation results.
The first water sector policy loan (WSPL), which was funded exclusively by AFD, aimed to support the Government of Jordan (GoJ) in introducing reforms in the water sector in order to provide better management to balance water supply and demand, to put the sector’s financial situation on a sounder footing, and to boost the performance of distribution companies. Building on the outcomes of this first WSPL, a second WSPL was jointly supported by AFD and the German Financial Cooperation through KfW. Both WSPLs were comprised of financial support to Jordan's national budget, policy dialogue on the water sector, and accompanying technical assistance.
The WSPL has led to major improvement in the debt management of the water sector. Other areas have not led to measurable effects yet; but, as it is an interim evaluation, all the effects are not supposed to have been achieved. Overall, the process has been favorably assessed: the policy-loan has the potential to lead to other achievements in the future in some areas such as the technical and commercial performance of WAJ or the nexus between energy and water or agriculture and water. Budget support is a complementary tool to investment projects, as it can address structural problems that cannot be tackled with projects.
Conditional on favorable overall macroeconomic development, the evaluation recommends the continued use of WSPLs.
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