invest

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invest
Maen Nsour, CEO Jordan Investment Board The
Hashemite Kingdom of Jordan November 2006
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Rigorous Reform

• Comprehensive Process (Political, Social and
  Economic)
• Monetary and Fiscal Reform
• Legal and Judicial Reform
• Public Sector Reform

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• The reform process has materialized into tangible
  results

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Macroeconomic Stability
1999
2004
2005
2006
Inflation ()
6.2 (Sept.)
0.6
3.4
3.4
95.5
67.4
55.5
Ext. Debt ( of GDP)
51.4 (July)
Foreign Res. ( bn)
4.8
1.99
5.7 (Sept.)
4.82
Exports ( bn)
4.28
3.88
1.83
2. 9 (July)
31.34 (July)
Market Cap. ( bn)
5.8
37.7
18.4
Real GDP Growth ()
7.7
7.2
3.4
6.4 (June)
GDP Per Capita ()
1,734
2,130
2,325
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Economic Growth

• Fastest Growing Sectors
• 1st Half of 2006

Growth
18.5
Construction
12.0
Industry (Manufacturing, Mining Electricity)
10.2
Electricity and Water
9.2
Wholesale, Retail, Restaurants Hotels
9.1
Financial Sector Real Estate
4.3
Telecommunication and Transport
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Economic Growth

• Fastest Growing Sectors
• 1st Half of 2006

Growth
18.5
Construction
12.0
Industry (Manufacturing, Mining Electricity)
10.2
Electricity and Water
The track record of sound macroeconomic
management, trade liberalization and reforms on
multiple fronts havetransformed Jordan into a
dynamic economy led by the private sector
International Monetary Fund
(IMF), 6 July 2004
9.2
Wholesale, Retail, Restaurants Hotels
9.1
Financial Sector Real Estate
4.3
Telecommunication and Transport
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FDI Performance Indicators (UNCTAD)
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Investment volume (Millions US) for projects
that benefitedfrom the Investment Law,
1996-September 2006
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Investment volume (Million US) of projects that
benefited from the Investment Law
Until Sept. 2006
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Investment volume (Million US) of projects that
benefitedfrom the Investment Law (Jan.-Sept..)
Until Sept. 2006
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Investment volume (Million US) of projects that
benefited from the Investment Law 2006-2002
according to nationality
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Attractive Investment Environment

• Investment promotion law incentives
• Income tax exemptions
• Flat income tax of 20
• Development areas are exempted for 20 years
• Customs and sale tax exemptions
• Capital and production goods are exempted from
  customs duties and sales tax

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Attractive Investment Environment

• People are our greatest asset
• Well educated population
• Over 91 literacy rate
• 192,000 students currently enrolled in
  universities
• 17 of the population receives higher education
• 24 universities (14 private, 10 public)
• 60 community colleges
• 35 vocational training centers training over
  10,000 people each year
• Competitive wage structure

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International Gateway

• Member of WTO
• Jordan-US Free Trade Agreement (FTA)
• Qualifying Industrial Zone (QIZ) Agreement
• Greater Arab Free Trade Agreement
• Euro-Jordanian Association Agreement
• Aghadir Agreement
• Jordan-EFTA FTA
• Jordan-Singapore FTA
• 120 other bilateral trade agreements
• Access To One Billion Consumers
• Custom Free and Quota Free

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Regional Gateway

• Transit Trade
• Transit trade has grown exponentially in recent
  years, increasing from 3.6 billion in 2000 to
  11.7 billion in 2004.
• Jordan is the gateway to the region, and has a
  pivotal role in rebuilding Iraq.

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AQABA Special Economic Zone
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AQABA Special Economic Zone

• Established in 2001
• Strategic location, crossing point of 4 countries
  and 3 continents
• Jordans only sea access (Port of Aqaba) and an
  International Airport
• Favorable tax regime and an attractive package of
  incentives
• 0 customs duties
• 5 income tax rate
• 0 tax on most products and services
• 7 sales tax rate
• 0 building and land tax
• 0 social services tax

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• Engines of Growth Cooperation

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Engines of Growth

• Electronics Household Appliances
• Exports grew by more than 200 between 1998 and
  2005, reaching 600 million in 2005, with Iraq
  and Syria being the largest markets.
• Home appliances, insulated wire and general
  purpose machinery are the main products.
• Jordan adopted the International Electrotechnical
  Commission (IEC) standards in August 2005.

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Engines of Growth

• Automotives
• 2 operating companies engaged in the assembly of
  transport vehicles and four-wheel drive cars
  (mainly for military use).
• 8 companies operate in the production of
  automotive parts, radiators, batteries, glass and
  filters.
• 75 of the production is exported.

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Engines of Growth

• Garments Textiles
• One of the major industrial sectors in Jordan and
  is growing rapidly.
• Employs over 50,000 people and generates about
  1.3 billion worth of exports.
• Achieved a net growth of over 200 in export
  levels, and over 20 in employment levels in the
  past several years.
• Major international buyers sourcing from Jordan
  include JC Penney, Levis, Liz Claiborne, Gap,
  Gloria Vanderbilt, Victorias Secret, Jones
  Apparel, Perry Ellis, PVH, Sara Lee, Banana
  Republic, Wal-Mart, Target.
• Products have duty-free access to major markets.

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Engines of Growth

• Tourism
• In 2005
• 3.0 million tourists
• 1.5 billion revenues
• A rich mix of history, archaeology, nature,
  religious and adventure tourism as well as the
  therapeutic nature of the Dead Sea.
• 27,000 historical sites, of which 4 are globally
  renowned Wadi Rum, Dead Sea, Petra, Baptism
  Site.
• Potential for expansion in health and conference
  tourism.

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Engines of Growth

• Pharmaceuticals
• Investment volume of 400 million
• Exports in 2005 300 million, 2010 target 1
  billion
• Largest Arab exporter
• 16 major investments employing 5,200 high caliber
  employees
• Compliant with intellectual property rights
  protection
• Efficient and advanced modes of production
• Available supporting infrastructure 8
  pharmaceutical colleges, 4 clinical research
  organizations, and 96 hospitals
• Increased investment in RD (Clinical Trial Law)

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Engines of Growth

• Health Care
• According to the Arab World Competitiveness
  Report 2005, Jordan is the top ranking Arab
  country in terms of health care.
• A leader in open heart surgery, kidney
  transplants, and optical surgery.
• 97 hospitals and 22.4 physicians per 1000
  population.
• More than 100,000 medical tourists annually.
• Annual revenues of 860 million.
• Medical Tourism Center for the region.
• Unique Spas and health resorts Dead Sea and
  natural hot springs in Maiin, Himme and Zara.

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Engines of Growth

• Information Communication Technology
• 220 private companies employing 16,000 high
  caliber employees
• Rapidly growing sector in FDI, more than 1.5
  billion since 2000
• Exports of IT Products exceeded 100 million in
  2005
• In the 2003-2004 Global Competitiveness Report,
  Jordan ranked 11th out of 102 countries in terms
  of government commitment to ICT.
• Telecom sector was fully liberalized in 2004.
• Huge potential for investment in
• Call Centres
• Education platforms/E-Learning
• Arabization/Arabic language content
• Animation

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A Strong Privatization Drive

• The Privatization Process gained strong momentum
  in recent years
• Regional Success Story
• 64 Transactions Successfully Completed
• Around 2.0 Billion in Privatization Proceeds
• 2.0 Billion in Associated Investments
• and much more to come

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A Strong Privatization Drive

• Completed Transactions
• Jordan Cement Factories (LAFARGE/France)
• Public Transport Corporation
• Jordan Telecommunications Co (France Telecom/
• France)
• Water Authority of Jordan (SUEZ Group/France)
• Airports Duty-Free Shops (ALDEASA/Spain)
• Aircraft Catering Center (Alpha/UK)
• Royal Jordanian Air Academy
• Arab Potash Co. (PCS/ Canada)
• Assamra Water Treatment Plant (SUEZ Group/France)
• Aqaba Container Terminal (APMT/ Denmark)
• JorAMCo (Abraj Capital/UAE)
• JATS
• JALCo
• Jordan Phosphate Mines Company (Brunei Investment
  
• Authority/ Brunei)

• The Privatization Process gained strong momentum
  in recent years
• Regional Success Story
• 66 Transactions Successfully Completed
• Around USD 2.0 Billion in Privatization Proceeds
• USD 2.0 Billion in Associated Investments
• and much more to come

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A Strong Privatization Drive

• Transactions in Progress
• Royal Jordanian
• Jordan Post
• Electricity Sector
• Aqaba Railway Corporation
• Amman-Zarqa Light Railway Project
• Expansion of Queen Alia International Airport
• Hazardous waste and hazardous medical
• waste project

• The Privatization Process gained strong momentum
  in recent years
• Regional Success Story
• 66 Transactions Successfully Completed
• Around USD 2.0 Billion in Privatization Proceeds
• USD 2.0 Billion in Associated Investments
• and much more to come

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Major Development Projects
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• Red SeaDead Sea Canal

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Red Sea Dead Sea Water Transfer- Phases

• Phase 1 Water transfer from Red Sea to Dead Sea
• At a cost of US1 billion
• Distance 180 km
• Annual water transfer 1,900 mcm/yr
• Alignment Wadi Araba

• Phase 2 Hydropower and freshwater production
• At a cost of US1-1.5 billion
• Hydroelectric generation capacity
• Reverse osmosis desalination facility
• Freshwater production capacity 850 mcm/yr

• Phase 3 Freshwater and excess electricity
  distribution
• Cost to be determined
• Freshwater distribution system to demand centers
• Transmission system for sale of energy

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Red Sea Dead Sea Water Transfer- Current Status

• Several bilateral and multilateral meetings were
  organized for the governments and the
  international organizations interested in Saving
  the Dead Sea.
• Letter of Agreement was signed and provided to
  the World Bank.
• The World Bank has been commissioned to prepare
  principles for the Terms of Reference (TOR) for
  the project Feasibility Study.

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Major Development Projects

• Expansion of Queen Alia International Airport
• Estimated Cost 300-500 million.
• Objective Expand and rehabilitate the existing
  terminals (currently 60,000 sq. meters).
• Description Improve airport operation, service
  quality and reliability, expand capacity and
  upgrade infrastructure to meet best international
  practices. (Additional 90,000 sq. meters to cater
  for 6 million passengers).
• Timeframe 2006-2009.

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Major Development Projects

• Light Railway from Zarqa to Amman
• Estimated Cost 150 million.
• Objective Establish an effective passenger
  transport between Amman and Zarqa (daily
  commuters 90,000 passengers) with promptness,
  frequency of trips, reliability and safety.
• Description
• (i) Electrically operated 1435 mm wide rail in
  two directions, total distance 29 km.
• (ii) BOT scheme for a 30 years period, 1st stage
  to include 36 carriages.
• (iii) Speed 90 km/hour.
• Timeframe 2006-2007.

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Major Development Projects

• Aqaba Port Relocation and Development

Main Port
Used for transport of general cargo, light
traffic, grains and phosphate
Container port
Used for rice, passengers, cement and containers
Industrial port
Used for oil imports and exports, timber, Potash
and fertilizers
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Major Development Projects

• Aqaba Port Relocation and Development
• Estimated Cost 830 million.
• Objective Provide an effective and
  efficient port services.
• Description
• Relocation of the main port area, including the
  phosphate terminal to the southern industrial
  zone of Aqaba.
• Development of the cleared-up main port area for
  commercial use.
• Construction of a multi-purpose general cargo
  terminal in the southern industrial zone.
• Timeframe 2006-2022 (Aqaba Development
  Corporation (ADC) segmented the projects
  components into 9 packages for interested
  developers).

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Major Development Projects

• Upgrading Expansion of Jordan Petroleum
• Refinery
• Estimated Cost 700 million.
• Objective Expand the existing refinery to meet
  the projected demand for light and intermediate
  cleaner oil products. Long-term concession ends
  February 2008.
• Description
• (i) Increasing crude distillation capacity to
  increase production.
• (ii) New reformer and Isomerization units for
  production of unleaded gasoline.
• (iii) Increasing storage capacity.
• (iv) Adding a sulphur plant, a hydrogen plant and
  solvent deasphalter units.
• Timeframe 2006-2008.

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Disi Water Conveyance Project
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Disi Water Conveyance Project

• Estimated Cost US500-600 million.
• Objective provide additional water supply from
  Disi aquifer to greater Amman area
• Description project components include (a)
  well fields consisting of 58 new boreholes (b)
  78 km well fields collectors of various
  diameters (c) One collector reservoir and
  pumping station in Disi Area (d) 325 km conveyor
  with 1.6 m diameter and regulating tank (e) One
  regulating tank and one reservoir in Abu Alanda
  near Amman (f) Booster station to Dabouq
  reservoir (g) Main reservoir in Abu Alanda Area
  and (h) Operation and maintenance facilities and
  infrastructure.

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Constructing Four New Electricity Generating
Plants
To generate 1500MW to meet the growing local
and regional demand Average annual local
demand growth on electricity is 4.6 annually.
All the technical and financial studies
related to this project. Citigroup has been
hired as a financial advisor to help the
refinery in selecting the strategic
investor. The project will be warded as BOO,
with a total cost of US 1.1 million
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Constructing Gas Distribution Networks

• A) The first and second phases of Arab Gas
  Pipeline were completed and now natural gas is
  fuelling 70 of total available capacity ( Aqaba,
  Samra and Rehab Power Stations ).
• B) Large industries will be converted to burn
  Natural Gas by the beginning of 2007
• C) Construction of the gas distribution network
  in Amman and Zarqa expected to start in the
  second half of 2007.
• D) The expected project cost is approx. US 700
  million

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Thank you for taking the time to view the
presentation.Please do not hesitate to contact
us for any further information or any
clarification.
Jordan Investment BoardP.O.Box893
Amman-11821-JordanTel 962 6 5608400Fax 962 6
5608427www.jordaninvestment.com