A troubled new power plant leaves Jordan beholden to China, raising concerns about Beijing’s influence

ATARAT, Jordan (AP) — Jordan’s Attar power plant has been envisioned as a landmark project that promises to provide the desert kingdom with a major source of energy while strengthening its ties with China.

But weeks after its official opening, the site, a sea of ​​crumbly black rock in the arid desert south of the Jordanian capital, has become a source of heated controversy. The deals surrounding the plant have put Jordan on the hook for billions of dollars in debt to China — all for a plant that is no longer essential to its capacity, due to other agreements reached since the project was conceived.

The result is inflaming tensions between China and Jordan and causing grief for the Jordanian government as it tries to challenge the deal in an international legal battle. As Chinese influence grows in the Middle East and America withdrawsthe $2.1 billion shale oil terminal has become to distinguish China’s broader model burdens many Asian and African countries False debt and served as a cautionary tale for the region.

“Atarat is a representation of what the Belt and Road Initiative was and has become,” said Jesse Marks, a nonresident fellow at the Stimson Center in Washington, referring to China’s blueprint to build global infrastructure and enhance Beijing’s political influence.

“Jordan is developing as an interesting case study not of China’s success in the region but of how China can become involved in middle-income countries,” he said.

Conceived some 15 years ago as a way to achieve national aspirations for energy independence, the shale oil plant at Attar is now causing outrage in Jordan because of its prohibitive price tag. If the original agreement continues, Jordan will have to pay China $8.4 billion over 30 years to buy the electricity generated from the plant.

Airlift workers from rural China toil in the shadow of the giant terminal, about 100 kilometers (60 miles) south of Oman.

When Shi Changqing arrived in the Jordanian desert earlier this year from Jilin Province in northeastern China, fears were running high in the workers’ dormitories that the project might stall, leaving everyone in a difficult situation, said the 36-year-old welder. .

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

With its scarce natural resources in a region awash in oil and gas, Jordan seemed to have lost a ticket. Then in the 2000s, shale oil trapped in the black shale that lies beyond the country hit. With the fourth largest concentration of shale oil in the world, Jordan had high hopes for a big win.

In 2012, Jordan’s Attarat Energy 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. Company officials said the proposal fit with the government’s growing desire for energy self-sufficiency amid the turmoil of the 2011 Arab uprisings.

But extraction proved costly, risky, and technically difficult. With the project delayed, Jordan concluded a $15 billion agreement to import massive amounts of natural gas at competitive prices from Israel in 2014. Interest in Attar waned.

Mohamed Maitah, CEO of Attarat Energy, said he has floated the project all over the world – from the United States and Europe to Japan and South Korea. He said not one thing.

To Jordan’s surprise, Chinese banks offered Jordan more than $1.6 billion in loans to finance the plant in 2017. A Chinese state-owned company, Guangdong Energy Group, bought a 45% stake in Attarat Power Co. , making the White Elephant the largest private project out of President Xi Jinping Belt and Road Initiative outside of China, according to the company.

Guangdong Energy Group did not respond to requests for comment.

Experts say the investment was part of a broader Chinese push into an Arab world hungry for foreign investment. The money for massive infrastructure projects came with few political strings attached.

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“China is not carrying the baggage of the United States with it in that we do have some concerns about democratic processes, transparency and corruption,” said David Schenker, former assistant secretary of state for Middle East policy. “For authoritarian countries, there is some oomph in China.”

As talk of American unreliability grows, China has turned to acquiring strategic assets in the Middle East, even in economically troubled nations. He. She He bought a lot of Iraqi oiltender a A port in northern Lebanon And they poured money during the era of President Abdel Fattah El-Sisi The new administrative capital in Egypt.

Experts say that with Syrian President Bashar al-Assad’s 2017 victory in his country’s civil war, China had an interest in investing in the Attarat project in neighboring Jordan as a springboard, anticipating a reconstruction boom in Syria that could unlock billions of dollars in investments. .

Under the 30-year PPA, the state-run Jordan Electric Power Company will have to buy electricity from the currently Chinese-led Al-Attar Company at an exorbitant rate, meaning the Jordanian government would lose $280 million annually, according to Treasury estimates. To cover the payments, energy experts said Jordan would have to raise electricity prices for consumers by 17% – a severe blow to an economy already saddled with debt and inflation.

The scale of the losses incurred by China shocked the Jordanian government. The Jordanian Ministry of Energy launched an international arbitration against the Attarat Energy Company in 2020 “on the grounds of gross injustice.”

When asked why Jordan initially agreed to such a lopsided contract, Jordan’s Energy Ministry declined to comment, as did the National Electric Power Company. As of June, hearings were being held in a Paris-based International Chamber of Commerce arbitration court. commerce.

Musa Hantash, a geologist with the Parliamentary Energy Committee, described the deal as a natural result of corruption and a lack of technical expertise.

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It is very difficult to convince these big companies to invest in Jordan. “There are things to help some people make a profit,” he said, without going into detail.

US officials portrayed the Attarat contract as a case of ” Debt trap diplomacy. “

The Chinese Foreign Ministry declined to comment on the Attarat project. But she has defended Beijing’s investments in developing countries, denied allegations that it has involved partners in debt, and claimed that China never forces “others to borrow from us by force”.

“We do not attach any political restrictions to loan agreements,” the ministry said, urging international financial institutions to help with debt relief.

Attarat Energy said it expects a decision in the case later this year. The rulings of the World Business Organization are legally binding and enforceable.

Maaytah and other company officials rejected Jordan’s allegations of unfair price inflation, and accused Jordan of reneging on its deal due to anti-Chinese sentiment.

Maaytah said that since the first two power units went into operation last fall, the Jordanian government has paid only half of its monthly dues.

In Jordan and other poorer Arab countries allied with the United States, the pace of Chinese investment has slowed in recent years.

Oman-based Chinese expert Samer Kharaino said that in the face of decline abroad and growing concerns at home, China is changing its approach to the region, focusing on the oil-rich Persian Gulf. Rich countries like the UAE and Saudi Arabia have no problem paying back China’s large loans.

For now, Jordan seems unwilling to take any more chances with China.

In May, Jordanian telecom company Orange signed a new agreement for 5G equipment. It has long been a customer of Huawei, the Chinese telecoms giant under US sanctions.

This time, she chose Nokia.

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