Japan’s International Cooperation Agency (JICA) is set to finance a 200 MW solar PV plant in Jordan after signing a loan agreement this week.

The $260m plant, which will be Jordan’s largest, is being developed in the Al-Muwaqqar district in Amman governorate by special-purpose firm Baynouna Solar Energy Company (BSEC), owned by Masdar and Finnish asset finance group Taaleri, which acquired a 30 per cent stake in the project this month.

The loan is co-financed by the International Finance Corporation and the OPEC Fund for International Development, JICA said in a statement. The amount of the loan was not specified.

BSEC will build and operate the plant, which aims to promote the country’s diversification of power sources and is expected to generate 563 GWh per year, or around 3 per cent of Jordan’s energy consumption, as well as saving 360,000 tonnes of carbon dioxide per year by replacing 1.4 billion litres of imported crude oil.

Masdar and state-owned National Electric Power Company have a power purchase agreement (PPA) in place for the plant and commissioning is planned for early 2019.

Along with Masdar’s 117 MW Tafila windfarm, the plant will advance Jordan’s target of producing 15 per cent of its domestic electricity needs from renewable sources. Combined, the two projects will account for nearly 18 per cent of the 1.8 GW of renewables, or 20 per cent of the energy mix, that Jordan plans to install by 2020.

The nation currently relies on imports for 97 per cent of its fuel needs, leaving it vulnerable to variations in fuel price. Jordan’s power demand is also growing as it has accepted around 650,000 Syrian refugees. According to JICA, BSEC’s solar project will supply power to communities hosting these refugees.