Construction Underway for Al-Mushatta Qualifying Industrial

UNCLAS SECTION 01 OF 02 AMMAN 004274 SIPDIS SENSITIVE SIPDIS STATE FOR NEA/ELA, NEA/RA (LAWSON),AND OES STATE PASS TO USAID STATE PASS TO EPA FOR INTERNATIONAL USDA FOR FOREST SERVICE/INTERNATIONAL INTERIOR FOR INTERNATIONAL/WASHBURNE E.O. 12958: N/A TAGS: SENV ETRD EAID PGOV JO SUBJECT: Construction Underway for Al-Mushatta Qualifying Industrial Zone, Jordan's First "Green" QIZ SENSITIVE BUT UNCLASSIFIED. HANDLE ACCORDINGLY. ¶1. (SBU) SUMMARY: The newly established Al-Mushatta Industrial City, a designated Qualifying Industrial Zone (QIZ) on the outskirts of Amman, aims to be the first "green" QIZ in Jordan. Al-Mushatta has partnered with an environmental services organization to screen prospective investors in the QIZ for their environmental/energy practices and to jointly advise the QIZ clients on implementing efficient designs. With the centralized provision of utility services and a target of being carbon neutral, this QIZ has ambitious plans, but selling the environmental leadership concept to prospective clients will be challenging. Potential client benefits include generation of Clean Development Mechanism revenues, reduction in running costs, improved public relations, and the ability to attach a "green" label to products. END SUMMARY. Background -------------- ¶2. (U) Established in 2002 as a public shareholding company with an investment capital of USD 42 million, Investors and Eastern Arab for Industrial and Real Estate Investments created Al-Mushatta Industrial City with the objectives of attracting high value investments to Jordan, benefiting from Jordan's free trade agreements, and taking advantage of the skilled local work force. Implementation plans began in 2004 to develop the 4.4 million square meters comprising Al-Mushatta. Strategically located, Al-Mushatta sits adjacent to Queen Alia International Airport in Amman, which includes free zone facilities, customs, and cargo service. The QIZ's location also offers easy access to the desert highway leading to Aqaba. A City within a City -------------- ¶3. (U) Al-Mushatta intends to establish state-of-the-art infrastructure including water wells, a power transformer, accessibility to main transportation arteries, telecom utilities, large parking areas, fire hydrant connections, and sewage and water treatment plants. Additionally, the site will include three bank branches, a mosque, development and support services, maintenance services, customs and clearance offices, a clinic, a supermarket and a canteen to make Al-Mushatta a complete industrial city that caters to the day-to-day requirements of its staff and investors. ¶4. (U) Econoff and ESTH officers toured the first phase of phase of Al-Mushatta construction, a 1,100,000 square meter site completed during the summer of 2007, that includes the main management and service buildings. Al-Mushatta QIZ partners include Jordan Aerospace Industries (light aircraft manufacture) and Taameer Jordan (pre-cast concrete, wooden doors, and aluminum frames). There are other joint ventures and partnerships with international manufacturers in the pipeline. Al-Mushatta Going Green as a Profit-Making Enterprise -------------- -------------- ¶5. (U) Al-Mushatta has been working with private Jordanian firm Energy Management Services Company (EMS) to provide comprehensive energy solutions to Al-Mushatta's clients for creating a "Green Industrial City." This will be the first of its kind in the Middle East, according to EMS official Nedal Zatari. Mohammad Turk, CEO of Al-Mushatta, commented that the future is "being green," and implementing such a concept in Al-Mushatta will distinguish the QIZ as forward-leaning, giving it an edge over other QIZs in Jordan, and helping it to attract investors from developed countries. In particular, EMS and Al-Mushatta expect clients will be lured by the ability to attach a green label to their products, enhance profits and their public image, and reduce costs. ¶6. (U) When queried as to how Al-Mushatta could ensure clients that their capital costs would not increase significantly due to investments in energy and environmentally-friendly design, Nedal said that Al-Mushatta offers the advantage of building from scratch, so capital costs for these green designs would likely be only 2 percent more expensive than conventional designs. He added that companies would ultimately save 25 percent in running costs, and not have to pay for their own utility infrastructure due to the city's centralized provision of utilities. He said EMS was finalizing a feasibility report that would detail these cost savings. Nedal noted EMS's previous work with the Dubai Green Building Council, which he believes has equipped the company with the necessary AMMAN 00004274 002 OF 002 experience to ensure that the clients, the industrial city, and the environment will all benefit from EMS's approach. ¶7. (U) The Industrial City also hopes that by striving to be carbon-neutral, its clients will be able to generate revenues under the UN Framework Convention on Climate Change-linked Clean Development Mechanism to help offset the costs of investing in environmental friendly designs. Solar energy is a critical area for the city, and Al-Mushatta management hopes to not only use solar energy for its clients, but also to potentially attract solar power vendors to the site. ¶8. (U) COMMENT: Mushatta has laudable yet ambitious plans, particularly in a country such as Jordan where environmentally-friendly industrial practices are a new concept. Convincing its prospective clients of the merits of environmental leadership will be key to its success. Visit Amman's Classified Web Site at http://www.state.sgov.gov/p/nea/amman HALE