Experts stressed that there are many challenges related to financing, regulation, and legislation that stand in the way of small and medium-sized enterprises (SMEs) in Jordan switching to alternative energy.
The experts emphasized the importance of shifting these projects to alternative (renewable) energy in a way that promotes inclusive and equitable economic growth in Jordan.
This came during a conference held by the Phenix Center for Economic and Informatics Studies in cooperation with the Economic Research Forum, during which the results of a study on the role of SMEs in promoting inclusive and equitable economic growth in the context of the transition to alternative energy in Jordan were released.
Ahmed Awad, director of the Phenix Center and co-author of the study, said that harnessing the potential of micro, small, and medium-sized enterprises in the transition to alternative energy not only contributes to mitigating environmental impact but also creates new job opportunities, helping to reduce high unemployment rates, strengthen the local economy, and enhance resilience in the face of climate change.
Dr. Ibrahim Al-Badawi, Director of the Economic Research Forum, said that although SMEs make up more than 90 percent of businesses in Jordan, they are still not heavily involved in alternative energy.
Khaled Ghazlani, representing the International Development Research Center (IDRC), spoke about the center's role in supporting the funding of SME studies in Jordan and other countries in the region.
Dr. Ibrahim Seif, former Minister of Energy and Mineral Resources and co-researcher of the study, presented the highlights of the study, noting that MSMEs constitute the majority of enterprises in Jordan and employ about 60 percent of the workforce.
Seif explained that MSMEs face many challenges, such as difficulty accessing financing, regulatory and legislative obstacles, strong competition in the market, poor coordination among them, weak networking with large enterprises, and the changing nature of technology and lack of adaptation to it.
The results of the study, which Seif presented during the conference, showed that technology, cost, and efficiency are constantly changing within the alternative energy sector, noting that this negatively affects the incentives for SMEs to switch to alternative energy.
The results showed that the vast majority of organizations want the government to subsidize electricity costs, with 91.2 percent of microenterprises, 94.9 percent of small enterprises, and 97.4 percent of medium enterprises.
Regarding the impacts of alternative energy technologies, the results showed that most MSMEs view them positively in terms of reducing environmental impact and creating new job opportunities.
However, access to information about backup generation technologies and changes in electricity tariffs was limited for a large number of MSMEs, according to the study.
The findings indicated that most of these organizations are planning to invest in alternative energy technologies, which requires improving access to this information, developing supportive policies, and strengthening infrastructure to transition to alternative energy in an efficient, equitable, and sustainable manner.
For his part, Dr. Rasmi Hamza, Executive Director of the Jordan Renewable Energy and Energy Efficiency Fund (JREEEF), said that a comprehensive energy transition has become a necessity, especially with the challenges related to the limited capacity of networks to absorb energy.
Hamza said that energy rationalization is an essential part of the transition to alternative energy and must be emphasized and encouraged by the concerned authorities.
Hanna Zaghloul, from the EDAMA Association for Energy, Water & Environment, said that there are obstacles facing the transition to alternative energy in Jordan related to the financial challenges resulting from the continued accumulation of losses by the National Electricity Company, and the cost of addressing these losses is borne by the productive sectors.
Zaghloul pointed out that the current legislation related to switching to alternative energy focuses only on certain sectors, such as industry, tourism, and homes, and excludes other important sectors, such as the commercial sector, which requires more comprehensive legislation in this field.
Dr. Ahmad Al-Salaymeh, an expert in renewable energy, said that there is a global trend towards relying on alternative energy, and Jordan has achieved many success stories in the field of alternative energy, as the contribution of alternative energy to electricity generation in Jordan has now reached 27 percent.
There are many opportunities to accelerate the transition to alternative energy, such as government support, developing relevant legislation, enhancing financing, and raising awareness in this field.
Mohannad Ajarmeh, vice president of the Association of companies working in the field of renewable energy, said that there is an urgent need for a fair equation for all parties related to the electricity system to ensure the continuity and development of this system.
He said that SMEs are the front valve of the local economy, but they do not receive much support, especially when it comes to switching to alternative energy.
The study recommended that alternative energy financing should be enhanced by attracting investment from the public and private sectors in alternative energy projects and utilizing Jordan's natural resources.