Global Courant
ATTARAT, Jordan (AP) — Jordan’s Attarat Power Plant was envisioned as a groundbreaking project that promised to provide the desert kingdom with a major source of energy while strengthening relations with China.
But weeks after its official opening, its location, a sea of black, crumbly rocks in the arid desert south of the Jordanian capital, has instead been a source of heated controversy. Deals surrounding the plant leave Jordan billions of dollars in debt to China — all for a plant that is no longer needed for its energy, due to other agreements made since the project’s conception.
The result is fueling tensions between China and Jordan and causing grief to the Jordanian government as it seeks to contest the deal in an international legal battle. As Chinese influence grows in the Middle East and America is withdrawingthe $2.1 billion shale oil station has come to characterize the broader Chinese model 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 plan to build global infrastructure and Beijing’s political influence to increase.
“Jordan is evolving as an interesting case study, not for China’s success in the region, but for how China engages with middle-income countries,” he said.
First conceived some 15 years ago as a way to fulfill national aspirations of energy independence, the Attarat shale oil plant is now sparking anger in Jordan over its huge price tag. If the original agreement holds, Jordan would have to pay China a whopping $8.4 billion over 30 years to buy the electricity generated by the plant.
Workers flown in 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 from northeastern China’s Jilin province earlier this year, fears grew in workers’ dormitories that the project would grind to a halt and abandon everyone, the 36-year-old said. welder. .
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“It is very strange to feel that because you are 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 found shale oil trapped in the black rock that underpins the country. With the fourth largest concentration of shale oil in the world, Jordan had high hopes for a big reward.
In 2012, Jordan’s Attarat Power Company proposed to the government to extract shale oil from the desert and build a plant that would use it to provide 15% of the country’s electricity supply. The proposal was in line with the government’s growing desire for energy self-sufficiency amid the turmoil surrounding the 2011 Arab uprisings, company officials say.
But extraction proved expensive, risky and technologically challenging. While the project fell behind, Jordan struck a $15 billion deal in 2014 to import large quantities of natural gas from Israel at competitive prices. Interest in Attarat waned.
Attarat Power Co. CEO Mohammed Maaitah said he has pitched the project all over the world – from the United States and Europe to Japan and South Korea. Nobody bit, he said.
To Jordan’s surprise, Chinese banks offered Jordan more than $1.6 billion in loans in 2017 to finance the factory. A Chinese state-owned company, Guangdong Energy Group, bought a 45% stake in Attarat Power Co., making the white elephant the largest. private enterprise to get out of President Xi Jinping Belt and Road initiative outside of China, the company said.
Guangdong Energy Group did not respond to requests for comment.
The investment was part of China’s broader push into an Arab world hungry for foreign investment, experts say. The money for major infrastructure projects came with few political commitments.
“China doesn’t bring the baggage of the United States in that we actually have some concerns about democratic processes, transparency, corruption,” said David Schenker, a former US assistant secretary of state for Middle East policy. “For authoritarian states, there is some attraction in China.”
As rumors of US unreliability grew, China turned to acquiring strategic assets in the Middle East, even in economically troubled states. It bought a lot of Iraqi oiloffered one port in northern Lebanon and deposited money into that of President Abdel-Fattah el-Sissi new capital in Egypt.
With Syrian President Bashar Assad gaining the upper hand in his country’s civil war in 2017, China had an interest in investing in the Attarat project in neighboring Jordan as a springboard ahead of a Syrian reconstruction boom that could see billions of dollars in investment. free, say experts. .
Under their 30-year power purchase agreement, Jordan’s state-run electric utility will have to buy electricity from now-actually Chinese-run Attarat at an exorbitant rate, meaning the Jordanian government would lose $280 million annually, the treasury estimated. To cover the payments, Jordan would have to raise electricity prices for consumers by 17%, energy experts said – a severe blow to an economy already saddled with debt and inflation.
The scale of losses to China stunned the Jordanian government. The Jordanian Ministry of Energy initiated international arbitration against Attarat Power Co in 2020. “on grounds of gross dishonesty”.
When asked why Jordan had agreed to such a skewed contract in the beginning, Jordan’s Department of Energy declined to comment, as did the National Electricity Co. From June, hearings were held in an arbitration tribunal of the Paris-based International Chamber of Commerce.
Musa Hantash, a geologist on the parliamentary energy committee, described the deal as the natural result of corruption and a lack of technical expertise.
“It is very difficult to convince these big companies to invest in Jordan. There are things to help certain people make a profit,” he said, without elaborating.
US officials portrayed the Attarat contract as a case of Beijing’s debt trap diplomacy.”
China’s foreign ministry declined to comment on the Attarat project. But it defended Beijing’s investment in developing countries, denied allegations that it ensnared partners in debt and argued that China never “forces others to borrow from us by force”.
“We never put political conditions on loan agreements,” the ministry said, urging international financial institutions to help provide debt relief.
Attarat Power said it expects a decision in the case later this year. Judgments of the World Business Organization are legally binding and enforceable.
Maaitah and other company officials rejected Jordan’s claims of unfairly high prices and accused Jordan of going back on its agreement over anti-China sentiment.
Since the first of two power stations went live last fall, the Jordanian government has paid only half of its monthly dues, Maaitah said.
In Jordan and other poorer Arab states linked to the US, the pace of Chinese investment has slowed in recent years.
Faced with setbacks abroad and mounting concerns domestically, China is shifting its approach in the region, said Amman-based China expert Samer Khraino, who focused on the oil-rich Persian Gulf. Rich states like the United Arab Emirates and Saudi Arabia have no problem repaying China’s large loans.
For now, Jordan seems unwilling to take any more risks with China.
In May, Jordanian telecommunications company Orange signed a new agreement for 5G equipment. It had been a long-time customer of Huawei, the Chinese telecom giant under US sanctions.
This time it chose Nokia.
