ATTARAT, Jordan (AP) 鈥 Jordan鈥檚 Attarat power plant was envisioned as a landmark project promising to provide the desert kingdom with a major source of energy while solidifying its relations with China.
But weeks after its official opening, the site, a sea of black, crumbly rock in the barren desert south of Jordan鈥檚 capital, is instead a source of heated controversy. Deals surrounding the plant put Jordan on the hook for billions of dollars in debt to China 鈥 all for a plant that is no longer needed for its energy, because of other agreements made since the project鈥檚 conception.
The result is fueling tensions between China and Jordan and causing grief for the Jordanian government as it tries to contest the deal in an international legal battle. As Chinese influence grows in the Middle East and , the $2.1 billion shale oil station has come to characterize China鈥檚 wider model that has with crippling debt and served as a cautionary tale for the region.
鈥淎ttarat is a representation of what the Belt and Road Initiative was and has become,鈥 said Jesse Marks, a nonresident fellow at the Washington-based Stimson Center, referring to China鈥檚 scheme to build global infrastructure and boost Beijing鈥檚 political sway.
鈥淛ordan evolves as an interesting case study not for China鈥檚 success in the region but for how China engages in middle-income countries,鈥 he said.
First conceived some 15 years ago as a way to fulfill national ambitions of energy independence, the Attarat shale oil plant is now causing anger in Jordan because of its enormous price tag. If the original agreement holds, Jordan would have to pay China a staggering $8.4 billion over 30 years to buy the electricity generated by the plant.
Laborers flown from rural China toil in the shadow of the giant station, some 100 kilometers (60 miles) south of Amman.
When Shi Changqing arrived in the Jordanian desert earlier this year from the Jilin province in China鈥檚 northeast, fears were mounting in the workers鈥 dormitories that the project could grind to a halt, leaving everyone in the lurch, the 36-year-old welder said.
鈥淚t鈥檚 very strange to feel that, being from China, you are not wanted here,鈥 he said.
With its meager natural resources in a region awash with oil and gas, Jordan seemed to have drawn a losing ticket. Then in the 2000s, it struck shale oil trapped in the black rock that underlies the country. With the fourth-largest concentration of shale oil in the world, Jordan had high hopes for a big pay-off.
In 2012, the Jordanian Attarat Power Company proposed to the government to extract shale oil from the desert and build a plant using it to provide 15% of the country鈥檚 electricity supply. The proposal fit the government鈥檚 intensifying desire for energy self-sufficiency amid the turmoil of the 2011 Arab uprisings, company officials say.
But extraction proved expensive, risky and technologically challenging. As the project lagged, Jordan struck a $15 billion agreement to import vast amounts of natural gas at competitive prices from Israel in 2014. Interest in Attarat waned.
Attarat Power Co. CEO Mohammed Maaitah said he pitched the project the world over 鈥 from the United States and Europe to Japan and South Korea. No one bit, he said.
To Jordan鈥檚 surprise, Chinese banks offered Jordan over $1.6 billion in loans to finance the plant in 2017. A Chinese state-owned firm, Guangdong Energy Group, bought a 45% stake in the Attarat Power Co., turning the white elephant into the largest private enterprise to come out of President Xi Jinping鈥檚 outside China, according to the company.
Guangdong Energy Group did not respond to requests for comment.
The investment was part of China鈥檚 wider push into an Arab world hungry for foreign investment, experts say. The money for large infrastructure projects came with few political strings attached.
鈥淐hina doesn鈥檛 bring with it the baggage of the United States in that we actually have some concern about democratic processes, transparency, corruption,鈥 said David Schenker, a former U.S. assistant secretary of state for Middle East policy. 鈥淔or authoritarian states, there鈥檚 some appeal in China.鈥
As talk grew of American unreliability, China turned to acquiring strategic assets in the Middle East, even in economically troubled states. It , tendered a and poured money into President Abdel-Fattah el-Sissi鈥檚 in Egypt.
With Syrian President Bashar Assad in 2017 gaining the upper hand in his country鈥檚 civil war, China had an interest in investing in the Attarat project in neighboring Jordan as a springboard, anticipating a Syrian reconstruction boom that could unlock billions of dollars in investments, experts say.
Under their 30-year power purchase deal, Jordan鈥檚 state-run electricity company will have to buy electricity from the now effectively Chinese-led Attarat at an exorbitant rate that means the Jordanian government would lose $280 million annually, the treasury estimated. To cover the payments, Jordan would have to raise electricity prices for consumers by 17%, energy experts said 鈥 a severe blow to an economy already saddled with debt and inflation.
The extent of losses to China appalled the Jordanian government. Jordan鈥檚 Ministry of Energy launched international arbitration against Attarat Power Co. in 2020 鈥渙n the grounds of gross unfairness.鈥
When asked why Jordan had agreed to such a lopsided contract to begin with, Jordan鈥檚 Ministry of Energy declined to comment, as did the 好色tv Electricity Co. As of June, hearings were being held at an arbitration tribunal of the Paris-based International Chamber of Commerce.
Musa Hantash, a geologist on the parliamentary energy committee, described the deal as the natural outcome of corruption and a lack of technical expertise.
鈥淚t鈥檚 very difficult to convince these big companies to invest in Jordan. There are things to help certain people make a profit,鈥 he said, without elaborating.
American officials portrayed the Attarat contract as a case of Beijing鈥檚 鈥 .鈥
The Chinese Foreign Ministry declined to comment on the Attarat project. But it defended Beijing鈥檚 investment in developing countries, denying allegations it ensnares partners in debt and arguing that China never compels 鈥渙thers to borrow from us forcibly.鈥
鈥淲e never attach any political strings to loan agreements,鈥 the ministry said, urging international financial institutions to help provide debt relief.
Attarat Power said it expects a decision in the case later this year. Rulings by the world business organization are legally binding and enforceable.
Maaitah and other company officials dismissed Jordan鈥檚 claims of unjustly inflated prices, accusing Jordan of backtracking on its agreement due to anti-China sentiment.
Since the first of two power units went live last fall, the Jordanian government has paid only half its monthly dues, Maaitah said.
In Jordan and other poorer Arab states allied with the U.S., the pace of Chinese investment in recent years has slowed.
Faced with pushback abroad and rising concerns at home, China is shifting its approach in the region, said Amman-based China expert Samer Khraino, focusing on the oil-rich Persian Gulf. Wealthy states like the United Arab Emirates and Saudi Arabia have no issue paying back China鈥檚 big loans.
For now, Jordan appears unwilling to take any more chances with China.
In May, Jordan鈥檚 telecommunications company Orange signed a new agreement for 5G equipment. It had long been a customer of Huawei, the Chinese telecoms giant under American sanctions.
This time, it chose Nokia.
