The Opec Fund for International Development has provided a $100 million loan to Jordan to help the kingdom enhance its food security and boost its agricultural development.
The financing is part of an emergency food security project, which aims to address the effects of a recent food supply crisis and stem the rise of commodity prices, the development finance institution of the world's largest oil group said in a statement on Tuesday.
The agreement is part of the fund's wider $1 billion Food Security Action Plan, which was announced in June, and is meant to boost food security in developing countries severely impacted by the conflict in Ukraine.
It was signed in Amman by Abdulhamid Alkhalifa, director-general of the Opec Fund, and Nasser Shraideh, Jordan’s Minister of Planning and International Co-operation.
“Ensuring food security is one of the most pressing global challenges at the moment and the Opec Fund is committed to supporting affected countries," Mr Alkhalifa said.
"We are pleased to extend our support to Jordan, where our financing will help vulnerable households and refugees as well as strengthen the resilience of the food sector.”
Jordan, with a population of almost 11 million, is an upper middle-income country. Still, it is resource-poor, with limited agricultural land, and is classified as a food-deficit nation, according to the World Food Programme.
It is, however, still considered a food secure country, but its food security is challenged by a number of factors, including slow economic growth and increased cost of living, the WFP added.
Jordan is a net importer of food, and its population, among them close to 1.3 million refugees from Syria, have been severely affected by a recent supply crisis, the Opec Fund said.
This week, the US Agency for International Development said it was providing $22 million to help the UN give cash handouts to Syrian refugees to buy food. The WFP last month slashed food stipends for 353,000 primarily Syrian refugees in Jordan by a third.
Global food prices, meanwhile, started to rise in the middle of 2020, when businesses shut down because of the coronavirus pandemic, straining supply chains, Deep Knowledge Analytics said in a recent report.
High food prices have increased world hunger and affected individuals, families and communities, the UN's Food and Agricultural Organisation said. The UN on Tuesday said that around 141 million people in the Middle East face food insecurity.
The loan will allow Jordan to import an additional grain supply totalling 390,000 metric tonnes, the Opec Fund said. New bunkers for the grains will be located in the Al Qatrana, Al Mowakkar and Al Ghabawi areas, with storage capacities that will last for up to four years to be built.
Jordan relies heavily on imports from the Black Sea region to cover its grain consumption, accounting for 98 per cent of wheat imports and 78 per cent of barley imports, the fund added.
The country has adopted a food security strategy, which includes short-term emergency response measures and medium-term investment plans and policy reforms as a response to the effects of Russia's military offensive in Ukraine.
The Opec Fund and Jordan have co-operated since 1977 in sectors including agriculture, energy generation, health, industry, education and small and medium enterprises, with more than $500m in loans and grants already provided to Amman.
The Opec Fund's assistance to the kingdom is the latest in a string of financing it has provided to a number of countries in recent months to help them address food security issues.
Last month, the fund provided a $60m loan to the Ivory Coast's Northern Agro-Industrial Pole Project to help finance the development of high-potential geographical areas for agriculture.
In August, the Opec Fund released a $15m loan to Zimbabwe to support an agricultural project aimed at transforming the small-scale farming sector and increasing farmers’ participation in market-oriented value chains.
