Meed | Jordan policymakers walk tightrope

Jordan policymakers walk tightrope

4 June 2024

Few countries will envy Jordan right now, as one of the Israel-Palestine-adjacent countries most severely impacted both economically and politically by the inevitable spillover of the war in Gaza.

Economic growth in Jordan has inevitably been hit by the conflict, especially in the country’s trade and tourism sectors. Domestic opposition to the war has meanwhile left Ammann walking a tightrope – opposing Israel while remaining part of a broad regional Western-backed coalition that saw Jordan play its part in stemming missile attacks launched by Iran at Israel in April.

The Gaza war is only one of a number of pitfalls confronting the government, which currently faces an unemployment rate of about 22%, desperate water scarcity, and the presence of 1.3 million Syrian refugees topping up the country’s existing population of refugees from Iraq, Palestine and elsewhere.

In these invidious circumstances, the country has performed well, but has also suffered negative consequences.

“Jordan has preserved economic and political stability despite significant external shocks, including social instability in the region (Arab Spring) and wars in neighbouring countries (Iraq and Syria), but these shocks have led to lower growth and significant government debt build-up,” says Erich Arispe, a senior director in Fitch Ratings’ sovereigns group.

For now, Jordan appears to be carrying off the delicate diplomatic work in relation to Israel. It is playing a critical role in the aid effort to Gaza, distancing itself from its neighbour by withdrawing its ambassador from Tel Aviv, and mothballing a planned water-for-energy project.

But it has so far resisted pressure from domestic protesters to adopt a more assertive stance towards Israel – not least since the government is wary of putting its relationship with the US under stress and threatening the $1.45bn in annual aid it receives from Washington.

Jordan’s reliance on Israeli water supplies will also play a part in Amman’s calculus. The kingdom typically sources around 80% of its natural gas from Israel’s offshore Leviathan field.

Despite deep antipathy to Israeli Prime Minister Benjamin Netanyahu’s government, the reality is that Jordan is locked into a cooperative relationship with its neighbour, including through the Hashemite dynasty’s custodianship of the Al-Aqsa mosque compound in Jerusalem.

Economic effects

While Jordan is unlikely to take radical steps to change its relationship with its neighbour, it remains deeply impacted by Israel’s actions, with the economic implications of the conflict in Gaza being felt nationwide.

The Jordan Hotel Association reported that about half of its hotel reservations were cancelled in October 2023. Fitch Ratings expects that lower tourism inflows, weaker external demand and continued regional political uncertainty will slow growth to 2.3% in 2024, from 2.6% in 2023.

“Nevertheless, we expect that the decline in US and European tourists will be partly compensated by resilience in Jordanian expats and regional tourists. Before the start of the Gaza conflict, Jordanian expats and Arab and GCC tourists accounted for almost three-quarters of total visitors,” says Arispe.

Although the IMF warned in May that the continuation of the war and the trade route disruptions in the Red Sea are affecting sentiment, trade and tourism, barring a significant escalation, the Jordanian economy should be able to navigate the challenges.

While Jordan is primed to run a large current account deficit, at a projected 6.4% of GDP in 2024, this is still lower than the 6.8% deficit recorded in 2023.

According to Fitch, the general government deficit will ease to 2.6% in 2024 and 2.4% in 2025, as expenditure restraint will balance lower-than-budgeted revenue growth and higher interest payments.

“One of the main economic challenges for policymakers is to lift growth prospects to support a sustainable reduction in government debt,” says Arispe.

In its May rating affirmation, Fitch estimated that general government debt (consolidating central government debt holdings of the Social Security Investment Fund and including the Water Authority of Jordan debt and NEPCO guaranteed debt) rose to 93.3% of GDP at the end of 2023.

Although it forecast debt will decline to 91.3% by 2025, this will remain significantly above the projected 53.6% median for sovereigns rated ‘BB’.

“Jordan’s fiscal strategy aims to lower debt to 80% of GDP by 2028 based on a combination of revenue increases, through measures directed at broadening the tax base, and expenditure restraint,” says Arispe.

“Nevertheless, Fitch considers that the sustainability of the current fiscal strategy will depend on the success of reforms aimed at lifting growth prospects combined with increased employment.”

External support

For all the Hashemite kingdom’s vulnerability to regional conflicts, its strategic position also carries advantages. Jordan has attracted substantial external support in the past year, drawing on its status as a regional source of stability.

Early in 2024, the IMF began a new four-year, $1.2bn Extended Fund Facility (EFF).

“From a broader perspective, one of Jordan’s strengths in terms of creditworthiness is the strong relations with multilateral organisations and allies, including the US and partners in the region, which supports Jordan’s financing flexibility. The sovereign is projected to receive total foreign assistance of $3.5bn (6.5% of projected GDP) in 2024,” says Arispe.

In addition, Jordan is attracting significant Gulf investment. In late May, the country’s Investment Ministry announced that Abu Dhabi Development Holding Company (ADQ) had completed the establishment of an infrastructure investment fund company in Jordan. This deal was first mooted during King Abdullah’s visit to Abu Dhabi in 2023.

This company will invest in infrastructure and development projects worth $5bn.

The government also remains committed to its reform agenda, for example, by gradually increasing water utility tariffs last year.

“We expect, though, that the pace of reform progress will continue to depend on the objective of preserving social stability, the resistance of vested interests and institutional capacity constraints,” says Arispe.

Reducing high unemployment is a government priority, especially among women and younger people.

The government is moving ahead with the first phase of its ambitious Economic Modernisation Vision 2023-33, which aims to increase growth potential (5%) and create 1 million jobs over the next decade through higher private investment in strategic sectors.

“The authorities have made progress in terms of digitisation of government procedures, most notably those related to investment, and public administration reform,” says Arispe.

“Nevertheless, increased geopolitical risks make it harder for the government to achieve the 2025 targets under the Vision’s 2023-25 first phase, including reaching 3% growth and exports reaching $13.7bn.”

Above all, the government will hope that external events will not yet have a negative bearing on an ambitious political reform programme that is invariably contingent on favourable regional relations.

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James Gavin

Exclusive from Meed

Tender issued for Libyan gas project
17 September 2026
Nakheel awards $218m Dubai Islands buildings deal
17 September 2026
Aldar and Mubadala acquire Masdar City Square
17 September 2026
Dubai announces new 80km highway corridor
16 September 2026
Contractors submit Expo 2030 convention centre interest
16 September 2026

Tender issued for Libyan gas project
17 September 2026
An invitation to bid has been issued for a contract to conduct environmental assessments for the project to expand the Mellitah oil and gas complex in Libya.

The bid submission deadline is 2pm today (17 September) Libyan time.

The scope of the project includes provision of:
- An environmental baseline study (EBS)
- An environmental impact assessment (EIA)
- An environmental management plan (EMP)
The client is Mellitah Oil & Gas (MOG), which is a joint venture of Italy’s Eni and Libya’s National Oil Corporation (NOC).

MOG is based in Tripoli and operates both onshore and offshore oil and gas facilities.

The joint venture owns and operates six major oil and gas fields across the North African country.

According to the tender documents, the company that is awarded the contract will need to prepare environmental management measures in compliance with:
- Libyan environmental legislation
- Ministry of Environment requirements
- NOC environmental guidelines
- Applicable international environmental standards and best practices
The expansion of the Mellitah oil and gas complex is part of a project estimated to be worth $8bn.

The wider project is known as the Mellitah Complex Expansion & CO2 Management Integrated Development Project.

It has six main packages:
- Onshore package
- Offshore Structure A
- Offshore Structure E
- Subsea pipeline package
- Site preparation work
- Carbon capture and storage facility
Security issues and political instability have been a major problem for Libya’s oil and gas sector since the country’s civil war started in 2011.

Earlier this month, the Mellitah oil and gas complex was forced to shut down temporarily due to a protest over deteriorating public services.

The existing onshore complex includes housing, processing units, storage facilities and export facilities.

It also serves as the launch point for the Greenstream pipeline, which delivers Libyan gas directly to Italy.

The planned expansion of the complex will involve:
- Construction of a new fourth gas processing train
- Construction of a third condensate train
- Construction of a third natural gas liquids fractionation train
- Construction of a fourth sulphur recovery unit train
- Installation of a hydrogen sulphide enrichment unit
- Installation of a sulphur recovery unit
- Construction of other associated facilities
The Mellitah complex is located about 100 kilometres west of Tripoli and is a key energy facility in the west of the country.
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Wil Crisp

Nakheel awards $218m Dubai Islands buildings deal

17 September 2026

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Dubai-based developer Nakheel, now part of Dubai Holding, has awarded a main construction contract worth more than AED800m ($218m) for phases one and three of Bay Grove Residences at Dubai Islands.

The contract was awarded to the local firm Metac General Contracting Company.

It covers the construction of 537 apartments, comprising one- to four-bedroom units, across seven residential buildings.

Phase one includes 296 units in four buildings, while phase three comprises 241 units across three buildings.

The works are scheduled for completion in late 2028.

Bay Grove Residences will ultimately comprise 1,154 homes across 15 buildings. Planning is under way for the remaining 617 homes in phases two and four, with further contract awards expected.

In August last year, Nakheel awarded a AED2.6bn ($708m) contract to Abu Dhabi-based Fibrex Contracting to build the Bay Villas project at Dubai Islands. The contract includes constructing 636 villas.

In April this year, another AED527m ($143m) contract was awarded to local firm Al-Nasr Contracting Company to construct the primary infrastructure and utilities works on Island B at the development.

The Dubai Islands development consists of five islands spanning 18.6 square kilometres. It features more than 59 kilometres (km) of waterfront and 20km of beaches, as well as parks, golf courses, promenades and cycling paths.

The offshore island project gained renewed momentum in 2022, when Nakheel unveiled a new masterplan and rebranded it as Dubai Islands.

The reclaimed islands were originally part of the Palm Deira project, which was partially completed before being put on hold in 2008.

READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> TUNNELS: The Gulf’s next construction boom is happening underground

To see previous issues of MEED Business Review, please click here

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Yasir Iqbal

Aldar and Mubadala acquire Masdar City Square
17 September 2026

Abu Dhabi-based sovereign wealth fund Mubadala Investment Company and local developer Aldar have completed the acquisition of Masdar City Square at Masdar City, in a transaction valued at AED918m ($250m).

The deal was executed through their joint venture established in 2024.

Masdar City Square comprises more than 47,000 square metres (sq m) of net leasable area across seven office buildings.

Completed in Q1 2026, the development is 99% occupied. Tenants include Taqa, the Department of Energy, Emirates College and the Mohamed Bin Zayed University of Artificial Intelligence.

The transaction expands the joint venture’s real estate portfolio in Masdar City, which is now valued at AED4.7bn ($1.3bn).

Masdar City is one of the region’s leading hubs for clean energy, artificial intelligence, advanced research and sustainable urban development.

The joint venture acquired The Link project at Masdar City for AED654m ($178m) in April.

Comprising about 32,000 sq m of net leasable area across five buildings, The Link is fully leased to a portfolio of major tenants, including Abu Dhabi Future Energy Company (Masdar) and the Mohamed Bin Zayed University of Artificial Intelligence.

The asset includes Grade A, Leed Platinum office space, a net-zero-energy headquarters building, a multi-use hall and residential accommodation, supporting its position as a high-performing, integrated component of Masdar City.

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Yasir Iqbal
Dubai announces new 80km highway corridor
16 September 2026

Dubai has approved the construction of the new fourth corridor, a major highway programme aimed at boosting inter-emirate connectivity, increasing road capacity and easing congestion.

The corridor will extend 80 kilometres, from Al-Faya Road in Abu Dhabi to Al-Shanouf Road in Sharjah.

It will include 12 lanes, 72 bridges and 17 tunnels.

The project is expected to reduce travel times by up to 60% and serve more than 3.1 million people, while providing links to Al-Maktoum International airport and Etihad Rail.

It will have the capacity to accommodate 24,000 vehicles per hour in each direction.

The project will be delivered in two phases. The first phase, running from Al-Shanouf Road to Dubai-Al Ain Road, will be delivered at a cost of AED3.5bn ($953m).

The second phase will stretch from Dubai-Al Ain Road to Al-Faya Road in Abu Dhabi.

Hamdan bin Mohammed: In line with the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum to boost investment in infrastructure, I approved the New Fourth Corridor to strengthen Dubai’s road network and enhance connectivity with the UAE’s federal road network.… pic.twitter.com/zlIyY2yKBN

— Dubai Media Office (@DXBMediaOffice) September 16, 2026

The scheme adds a fourth spine to a network that has long relied on three main corridors: the E11 (Sheikh Zayed Road/Al-Ittihad Road); the E311 (Sheikh Mohamed Bin Zayed Road) and the E611 (Emirates Road), which together carry more than 850,000 vehicles commuting between Dubai and the northern emirates daily.

That concentration has made the route one of the country’s most congested, with peak-hour bottlenecks a persistent problem for residents. The new corridor is designed to divert a significant share of that traffic onto a higher-capacity route, rather than add pressure to the existing network.

The project also aligns with the Dubai 2040 Urban Master Plan, which anticipates population growth to 5.8 million by 2040 and calls for the expansion of roads, railways, airports and ports to support that growth and reinforce Dubai’s position as a global trading hub. This is reflected in the corridor’s direct links to Al-Maktoum International airport and Etihad Rail.

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Yasir Iqbal

Contractors submit Expo 2030 convention centre interest

16 September 2026

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Expo 2030 Riyadh Company (ERC), responsible for delivering the Expo 2030 Riyadh venue, received contractor interest on 14 September for a contract to design and build a convention centre in the site's Collaboration District.

Construction is slated to begin in January 2027 and take 29 months. The development will cover a total gross external area of more than 28,000 square metres (sq m). The total programme area will be about 22,000 sq m and the gross floor area will be 17,000 sq m. The maximum height of the building will be 41.5 metres.

The venue will be laid out across two levels, with a mezzanine, roof terraces and a 4,030 sq m basement, in addition to mechanical, electrical and plumbing and back-of-house spaces.

Two flexible exhibition halls are planned, covering a combined 7,280 sq m, as well as 3,800 sq m of pre-function space, 650 sq m dedicated to meeting rooms and 2,200 sq m of outdoor exhibition space in the north and south plazas.

The appointed main contractor will assume responsibility for packages including the early works substructure and the lead design consultant's deliverables, while carrying out the full scope of superstructure, above-ground waterproofing, external facades, masonry, base build and specialised fit-outs for VVIP, VIP and visitor areas.

Further scope includes delivering comprehensive MEP services; vertical transportation; final infrastructure tie-points; public-realm hard and soft landscaping; testing, commissioning, handover documentation; and management of the defects liability period.

The expression of interest notice was floated on 13 September.

The unusually brief expression of interest deadline of just one day underscores a compressed procurement timeline.

This accelerated tender and evaluation schedule signals that project organisers are operating under time pressure to secure contractors and maintain the tight schedule required ahead of the event's opening.

ERC expects to award the formal contract by the end of this year and begin construction in January next year.

The project is due for completion in early 2030, in time for the main event in October of that year.

Site progress

Construction activity at the Expo site is accelerating, with Riyadh moving to award its first major vertical contracts and advancing infrastructure works across the programme.

Earlier this month, MEED exclusively reported that ERC has tendered a contract to deliver the Souq areas within the expo site.

These areas are divided into five precincts, with a total development area of about 300,000 sq m.

In September, Saudi Arabia’s Royal Commission for Riyadh City awarded a design-and-build contract for the construction of a new metro station catering to the Expo 2030 site.

In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Alyamama Company.

The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle (EV) charging.

These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners.

That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems and EV charging stations.

The masterplan covers 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

The Public Investment Fund, Saudi Arabia’s sovereign wealth vehicle, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for Expo 2030.