DISCLAIMER This Project Description is being made available on behalf of the Government of Jordan (GOJ) for the purpose

of providing information to interested parties in the various procurement activities occurring for the Jordan Red Sea Project (JRSP). This Project Description does not purport to contain all of the information that an interested party may need or desire. It has been prepared to assist interested parties in making their own evaluation. In all cases, interested parties wishing to participate in procurement activities should familiarize themselves with the contents of the RFQ and conduct their own investigations, due diligence and analysis of the information set forth in this document. This RFQ has been prepared on the basis of information available to the GOJ. Neither GOJ, its representatives or advisors make any representation (express or implied) or warranty as to the accuracy or completeness of this document or the information contained herein and shall have no liability for it or for any other written or oral communication transmitted to or received by the recipient in the course of the recipients evaluation of the proposed transaction. Only those particular representations and warranties which may be made by the GOJ, in a definitive written communication, when and if one is issued, and subject to such limitations and restrictions as may be specified in such communication, shall have any legal effect. This RFQ may contain certain interpretations, explanations and/or summaries of Jordanian laws, procedures or regulations prepared solely to acquaint the recipient with the matters described in a general manner only and not intended to be definitive or to disclose or deal with all aspects of such laws, decrees, regulations, licenses or other governmental authorizations that may be important to a recipient. GOJ reserves the right, in its sole discretion, to modify any of the information provided herein, or without prior notice or assigning any reason therefore, to decide not to proceed with the Project. Neither the GOJ nor any of its respective agents, representatives, advisors or consultants will be liable or responsible to any person for any cost or expense incurred in responding to this RFQ or in any investigation or transaction, whether or not consummated, which may follow.

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1.1

Jordan Red Sea Project Description

The Jordan Red Sea Project (JRSP) is a water infrastructure and economic development project designed to assist the Hashemite Kingdom of Jordan establish water independence through a longterm and stable water supply. The core project involves the financing, planning, design, construction, operation and maintenance of a water conveyance system from the Red Sea to the Dead Sea and to Amman with large scale desalination of seawater for Jordan and other regional interests. Excess seawater and desalination brine will be discharged to the Dead Sea. A financial program will be designed by the JRSP Company and its partners to adequately support project financing and provide a reasonable rate of return to project investors. In order to facilitate project financing, a broad based water infrastructure and economic development program will be integrated and implemented in Jordan. The JRSP concepts are summarized in the JRSP Grand Vision video that is available at the following internet website: www.JRSPcompany.com The JRSP Grand Vision video summarizes the entire JRSP Project. Figure 1 on the following page is a summary of the JRSP Water Infrastructure Concept. 1.1.1 Authority

The JRSP Project will be implemented by a private company referred to herein as the JRSP Company under authority granted by the constitutional authority of the GOJ cabinet, the Privatization Law that enables PPP frameworks, the Water Authority of Jordan (WAJ Law), the Development Areas Law No. 2 of 2008, the Aqaba Special Economic Zone Law, and the Jordan Valley Authority Law. The JRSP Company will be the operating body through which the project will be executed, constructed, managed, maintained and operated. The JRSP Companys mission and objectives will be defined in the JRSP Implementation Plan developed jointly by the JRSP MSC, the Master Program Manager and the Master Developer. The JRSP Company will be managed through operating agreements between the GOJ, the Master Developer, and the Master Program Manager. This organizational structure creates the opportunity for internationally based grants, multi-lateral government and private sector financing and private sector investment. The JRSP Master Developer is the entity functioning as either a Company, Consortium, or Joint Venture that will lead the JRSP Project as a partner in the JRSP Company and have overall responsibility to carry out the requirements of the JRSP Implementation and Financial Plans. The Master Developer entity includes the Master Contractor, Master Infrastructure Operator, and Master Economic Growth Manager. The JRSP Company, which includes the Master Developer and the GOJ, will be the Project Sponsor. The JRSP Master Program Manager is empowered by constitutional authority of the GOJ cabinet and through inter alia the Privatization Law, WAJ Law and the Development Areas Law to conduct the procurement for the JRSP Master Developer. The JRSP Project will be conducted under existing laws or a new JRSP Law, which is anticipated to be approved by the GOJ in 2011. Further operational boundaries will be established in operating and shareholder agreements to be created for and by the JRSP Company Board of Directors and partners.

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Figure 1 Summary of the JRSP Water Infrastructure Concept

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1.1.2

Jordans Water Demand

As of 2007, Jordan has annual freshwater resources of 867 million cubic meters per year (MCM/yr) with a total demand of 1505 MCM/yr, creating a demand deficit of 638 MCM/yr1 . By the year 2040, this deficit is anticipated to be nearly doubled if a solution is not implemented. Despite vast improvements to water infrastructure and water management, the GOJ requires a sustainable, long-term water supply source. For Jordan, the most logical source of available water on a consistent basis is the Red Sea. Through a large scale seawater extraction and desalination process, the complete JRSP concept will ultimately provide 930 MCM of freshwater annually. It is anticipated the GOJ will be the off-taker of freshwater and brine along with international institutions from the JRSP, however, through the GOJ, the JRSP Company could contract with other entities for water sales. 1.1.3 JRSP Water Conveyance and Infrastructure

The JRSP water conveyance system has been conceptually planned as a network of large diameter pipelines and pump stations placed at or near ground surface to minimize construction costs while maximizing system flexibility. The engineering concept plan includes some of the worlds largest facilities for water treatment/desalination, conveyance piping and pumping. Seawater Pump Stations: The seawater conveyance concept utilizes three (3) primary seawater pump stations: one Intake Pump Station that has eleven (11) pumps each sized at 5,200 hp and two seawater Booster Pump Stations that each have eleven (11) pumps each sized at 12,600 hp. In total, the seawater pumping will require 292,800 hp of pumping energy. Seawater Pipelines: The seawater intake, and seawater and brine conveyance pipelines will require nearly 525 km of 2.7 to 3.7 meter diameter steel pipe. Freshwater Pipelines: The freshwater conveyance pipelines will require 348 km of 1.0 to 2.1 diameter steel pipe. Desalination: Two large scale seawater reverse osmosis (SWRO) desalination facilities will produce 930 MCM per year of freshwater for Jordan. One of these plants is anticipated to produce 850 MCM of freshwater per year. Hydro-electric Power: In total, the Project will consume 995 MW per year of electricity. Two seawater and one freshwater hydro-electric power stations will be constructed to capture approximately 180 MW of electrical energy per year. This represents 18% of the Projects power needs. Economic Development Concepts

1.1.4

The JRSP water infrastructure capital and operational costs might exceed the amount of potential water related revenues that could be collected through conventional cost-recovery methods typically used for projects of this type. Consequently, in conjunction with the potential related water revenues, the JRSP Company will commence a comprehensive economic development program within Jordan that enhances overall project revenues and creates development related revenue streams in support of the overall project financing plan to repay project debt and provide a reasonable rate of return to project investors. The development program will involve the planning, financing, design and construction of multiple residential developments and commercial areas, industrial centers, resort areas and other JRSP related
1

Water for Life: Jordans Water Strategy 2008-2022, Jordan Ministry of Water, November 2008 and February 2009

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business support functions. The Master Economic Growth Manager will be the responsible entity for these projects and may outsource development activities to other sub-developers. Figure 2 on the following page is a summary of the JRSP Economic Development Concept. The JRSP development program envisions three principal economic development concepts, which are essentially new cities, resorts and industrial development concepts across multiple sites in Jordan. South Amman City: Development of high-density residential housing to accommodate a 30year population growth of up to 1,000,000 people in the region south of Amman. South Dead Sea City: A mixed-use city featuring a JRSP-related industrial development zone with an adjacent residential community and commercial town center to support a 30-year population growth of up to 180,000 workers and residents south of the existing South Dead Sea industrial area. North Aqaba City: Development of a new mixed-use city with technical and professional employment, a variety of workforce housing and a commercial town center in the Araba Valley corridor, north of Aqaba to support a 30-year population growth of 40,000 people. This Economic Development Zone (EDZ) includes a potential university campus and destination theme park. Resorts: Development of five new resort properties with an assortment of amenities focused on the growing tourism and recreation industry. Resorts could be located near the south Dead Sea, Petra, Wadi Rum and other national park areas, and Aqaba. Gated Communities: Development of low-density, gated communities of luxury villa homes in multiple locations to accommodate 120,000 residents in 47,000 homes.

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Figure 2 Summary of the JRSP Economic Development Concept

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1.2 1.2.1

Project Objectives and Requirements

JRSP Project Mission and Key Objectives

The JRSP Company has four overall primary objectives: Establish a secure and affordable water supply for Jordan while saving the Dead Sea from extinction. Support widespread economic growth. Provide for potential regional water. Facilitate private and public financing through the JRSP Company. The JRSP Master Program Manager has developed an array of concepts for economic development in Jordan as an integral part of the water infrastructure project. The Master Developer will be ultimately responsible for planning, developing, implementing and managing a comprehensive economic development program for the JRSP. The Master Developer team must have the capability, experience and qualifications to plan and implement the JRSP economic development vision. 1.2.2 Project Parameters

Contained within the overall project objective, several project parameters have been identified that should be maintained as the JRSP program evolves. They include: a. The JRSP water infrastructure project to deliver 930 MCM/yr must be divided into manageable and financeable phases, and coordinated to meet regional user needs. b. Under the current JRSP conceptual plan, excess seawater and desalination brine will be discharged to the Dead Sea. Phase I of the JRSP will include a full-scale pilot testing plant to evaluate the impacts of mixing desalination brine/Red Sea water with the Dead Sea water. The analyses and environmental studies undertaken in the World Banks feasibility studies and elsewhere will be fully considered and evaluated along with the results of the JRSP Phase I pilot testing plant studies. c. The JRSP Company must act diligently and take steps to commence and complete Phase I of the water infrastructure to deliver a minimum of 210 MCM/yr of freshwater into Jordan by end of year 2018 with allocations of 160 MCM/yr for Amman and the Dead Sea area and 50 MCM/yr for Aqaba. d. The JRSP Company must conduct environmental studies to examine, evaluate and when appropriate, mitigate to practical and acceptable levels the environmental impacts directly related to Phase I of the JRSP. e. The JRSP Company must plan, execute, and manage a large-scale, broad based economic development program in Jordan. 1.2.3 Phasing Objectives

The magnitude of the JRSPs capital and operations costs to deliver 930 MCM/yr of freshwater dictates that a phased project over time is a logical and sensible approach. Accordingly, the JRSP is anticipated to be divided into multiple phases, each assigned a freshwater amount to be delivered in a specific period of time. See Table 1 below for the proposed JRSP Phase I through Phase V water delivery objectives.
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Table 1. JRSP Phasing Schedule and Water Flows

Project Phase I II III IV V Construction Period 2011-2018 2019-2025 2028-2035 2038-2045 2050-2055 Sea Water Extraction 400 MCM/yr 700 MCM/yr 1,070 MCM/yr 1,800 MCM/yr 2,150 MCM/yr Fresh Water Delivery* 210 MCM/yr 370 MCM/yr 560 MCM/yr 720 MCM/yr 930 MCM/yr Dead Sea Discharge 190 MCM/yr 330 MCM/yr 510 MCM/yr 1,080 MCM/yr 1,220 MCM/yr

*SWRO No. 1 and SWRO No.2 combined treatment capacity

A phasing plan will allow manageable portions of the overall project to be planned, financed, designed, constructed, started, operated and maintained. The Phase I schedule is designed to offer the best approach to deliver the first tranche of water by 2018. Each phase subsequent to Phase I will be ring fenced from a project development and project financing basis with provisions made on how to use or expand on existing common facilities which have been designed to be developed and phased on a modular basis. 1.2.4 JRSP Phase I Objectives

The JRSP Company and its partners will have several project and business objectives that it must accomplish in order to make Phase I of the JRSP successful. These include: a. The execution of the JRSP Company governance structure and operating agreements for Phase I of the JRSP in order to commence program planning activities in June 2012. These agreements will include but may not be limited to: JRSP Company Shareholder Agreements JRSP Company Development and Operating Agreements Land Lease Agreements Water Agreements with the GOJ JRSP Company Financing Agreements Power Agreements b. In coordination with the water infrastructure and conveyance project, prepare a comprehensive economic development plan with identifiable and quantifiable revenue streams that produce sufficient income to the JRSP Company to support project feasibility in terms of achieving minimum IRR and secure project financing. c. Secure project capital and financing mechanisms for JRSP Phase I by leveraging a combination of future water contracts and the JRSP economic development program. Financing may be derived from numerous sources including, Commercial Banks Development Banks Export/Import Banks Mutual and Pension Funds Marketable Securities Grants Equity and Private Investments

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d. Plan, design, construct, start-up, manage, operate and maintain the JRSP Phase I water infrastructure that is capable of delivering 210 MCM per year of freshwater to Jordan by 2018 and discharging 190 MCM brine to the Dead Sea. e. Use the initial work in Phase I to conduct environmental studies to evaluate both the impact of JRSP infrastructure and development on fauna and flora in the development areas as well as a pilot study on the initial flow of seawater and desalination brine discharge to the Dead Sea. f. Implement and manage the economic development program that provides the JRSP Company with non-water related revenue streams adequate to support the repayment of project debt and provide a reasonable rate of return on investment to project stakeholders and investors. Economic Development Objectives

1.2.5

The JRSP economic development vision is briefly summarized below. The development concepts and financial goals are based on the estimated project financial needs over a 30-year period. In general, the concepts presented and any other concepts proposed must be able to provide revenue streams that form a cumulative income to the JRSP Company that support the repayment of project debt, provide a reasonable rate of return to project investors and provide income for the JRSP Company and supports project financing requirements of the project. The ultimate JRSP economic development objectives include: a. Identify and secure land areas for the JRSP water infrastructure and real estate development program, in the early stages of project planning. These lands and rights-of-ways will be provided by the GOJ to the JRSP Company. b. Develop high-density housing to accommodate nearly 1,000,000 people over the life of the project and based on demand. c. Develop new urban centers near Aqaba, south of the Dead Sea and areas south of Amman. d. Develop multiple resort areas to accommodate the growing tourism demand. e. Develop gated communities in desirable areas for single family houses and villas. f. Develop industrial zones for JRSP related businesses and new manufacturing industries.

g. Develop a fee structure for Public Improvement Fees (PIF) within JRSP development areas to support JRSP financing. h. Develop JRSP related business opportunities throughout the JRSP service area and other areas of Jordan. These economic development objectives will be supported by having the GOJ provide exclusive development and revenue rights for economic development objectives along with development rights and off-take agreements for water to the JRSP Company. Both sets of rights (water and non-water) will enable development of water and non-water revenue streams for JRSP Company.

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