1. Policy Instruments Proposals for RECP
SwitchMed Connect 2016
Policy Instruments Proposals for RECP
Drawing on the outputs of the Policy Baseline Review and Policy Instruments Proposals
Jordan
Rose Smadi-ACI
Muhiedeen Al-Tawalbeh-NERC/RSS
Jehan Haddad-CPU/WEC/RSS

2. Drawing on the Policy Baseline Review
Green initiatives would be adopted and RECP could be mainstreamed in the industrial sector if the government would give the suitable encouraged incentives and funding instruments, as well as if we have effective information system.
Most of industries are SMEs which need specific focus and interest to sustain and develop.
High interest rate of green soft loans up to 6%, application and approval consume time and complicated selection criteria.
There is no a direct linkage to a full technical assistance for SMEs to generate feasible options ready for investment with available financial schemes.
Not sufficient guarantee is provided for environmental performance projects and SMEs.

3. Drawing on the Policy Baseline Review
Currently there is not a clear integrated information system addressing the industrial sector regarding RECP.
There are scattered information systems in different organizations like in chambers of industry and ministries but they are mainly focus on contact details, statistical information, capitals, etc.
Analytical tools such as MFCA and benchmarking are not addressed within the current information systems.

4. Policy Instrument Proposals
The following proposed policy instruments were discussed with the National Focal Points of SwitchMed Project (MoEnv) and SwitchMed TEST II Project (MIT) and the key stakeholders (In-country Group) and modified accordingly.
RECP Information and Communication System for the Industrial Sector
RECP Finance Model for SMEs
RECP Excellence Award and Eco-Label for green industries

5. Policy Instruments’ Workshop conducted at RSS on 9th May 2016

6. Selected Policy Instrument
RECP Finance Model for SMEs
Other existing financial schemes, such as commercial banks and leasing companies
Does not need Soft loans
Does not need TA
RECP Finace Window for SMEs
Jordan Environment Fund
Jordan Renewable Energy and Energy Efficiency Fund
Central Bank Fund
Donners, JEDCO, Others
Risk Guarantee
Soft Loans
Grant
Technical Assistance
Application
Need TA
Need Grant
Need Soft loans
Need Risk Guarantee
Technical Assistance (TA):
For specific case or comprehensive TA to identify saving and environmental performance investments depends on the request of the client.
The client shall write legal binding commitment to go forward with feasible options as per the results of TA.
Each window shall have a list of accredited technical consultants to perform the TA and shall prepare a criteria and template for the TA.
Grant:
A ceiling limit shall be identified as per the model study.
Soft loans:
The interest rate and ceiling limit shall be identified.
Low interest rate is recommended (<2%).
Grace period is recommended (1-3 years) and payback period up to 10 years depending on the type pf the project and its investment value.
Risk Guarantee:
If more investment is needed (> soft loan ceiling limit), the window could provide guarantee for external financing sources including commercial banks and leasing companies.

7. Selected Policy Instrument
This instrument aims to develop a sustainable and practical/applicable finance model that is valid for different cases and sources of finance and to:
Promote RECP options among SMEs.
Establish well developed finance scheme.
Barriers
Insufficient and ineffective cooperation of existing financial instruments.
Lack of available finance to apply the needed study (Full Proposal).
Lack of incentives and legal enforcement for environmental performance options.
Lack of SMEs interest and application.

8. Selected Policy Instrument
Following are the main activities to establish the instrument:
Policy instrument concept note (Action fiche) has been shared with NFPs, MoEnv to facilitate UNEP finance and with MIT to find financial support for further study.
NFPs and the donor shall assign consultant(s) to carry out a comprehensive study (full applicable instrument) in the operations and functions of the model and how to integrate it to the existing financial instruments.
This instrument shall be presented to each of the existing funding programs to recognise its response to adopt it, how can this be done and the needed actions for that. Central bank shall be communicated to involve the RECP funding to SMEs in its finance programme.
There is a need for a high-level committee to manage and enforce this instrument mainly to allocate a specific budget of the existing funding programs to implement RECP in the industrial sector.
At least one year is needed to have well established and functional model.

9. Identifying support for policy implementation
Following are the relevant stakeholders who have engaged in developing/modifying the instrument concept note, showed ownership and interest and can be potential partners to further develop the proposal and eventually implement actions:
Project’s NFPs (MoEnv and MIT)
Project’s In-country group
MoEnv (JEF, Policies & Regulations Unit and Green Economy Unit)
MIT (Inspection and International Aid Programs Section/Industrial Development Directorate)
MEMR (Jordan Renewable Energy and Energy Efficiency Fund (JREEEF))
Central Bank
Jordan Enterprise Development Corporation (JEDCO)