Jordan is one of the most water scarce countries in the world where resources are far below the water poverty line which is 1000 m3 per capita per year. Adding to water scarcity, energy availability is another challenge where 96% of the demand is imported from outside. Due to climate change, both water and energy sectors are expected to be negatively impacted. Lack of water and high prices of energy will both hinder the economic growth and employment rates adding further stress on the current high unemployment percentage specially among youth.
Need for Green Economy
To get out of this bottleneck, there is a need to employ youth through green economy and to promote green entrepreneurship, start-ups, and Small Medium Enterprises (SMEs). Even the green innovation culture in Jordan is still new, there are few organizations that work in this field such as Queen Rania Center for Entrepreneurship (QRCE), Business Development Center (BDC), Abdul Hameed Shoman Foundation (AHSF), Oasis 500, CEWAS, and Shamal Start.
Shamal Start – Leading the Way
Shamal Start is one of the business accelerators in Jordan which works on green entrepreneurship and start-ups. Students from Irbid and Mafraq submit their green ideas to benefit from the mentoring and financial support. Here are some of the green start-ups that have passed the eligibility criteria for Shamal Start:
- Petra for Green Community Entrepreneurship which works on solving environmental issues by developing solutions for water, energy, and food related challenges. One of their products is waste-free water filter which could save up to 50% of water.
- Mattab which developed a speed pump that produce renewable energy from the hydraulic pressure of the vehicles movement.
- BioJust which developed an automated device that convert organic waste from vegetable oils into biogas.
- A+ Solar which uses the kinetic motion to improve the thermal comfort and day lighting through the efficient utilization of the sun light.
Business Development Center (BDC) provides the needed training and financial access for entrepreneurs and start-ups including the green ones through different fund programs such as SANAD and Youth Employability. There are many other national and international NGOs that promote entrepreneurship but with less focus on green innovation. Adding to that. Universities in Jordan have been always contributing to the green and sustainability culture.
The German Jordanian University in Amman launched a Green Hackathon in 2016 to raise awareness on water and energy-efficient solutions among students and to encourage the green entrepreneurship culture. The students were asked to come up with solutions for challenges in the industries and society. The topics in that event were renewable energy solutions for the university, waste/ water management in smart cities, energy consumption optimization for courier service, and sustainable shelter/ room for rural areas.
Green Finance in Jordan
Financial support in the early stages and accessibility to fund were reported as the major obstacles for green entrepreneurs, start-ups and SMEs in Jordan. SMEs represent 99 % of the private sector and employ 77% of the labor force. However, they receive only 13% of the total value of the commercial loans. Jordan was ranked 185 out of 189 countries in both 2014 and 2015 in terms of access to credit in a report for the World Bank.
Microfinance in Jordan has been a successful alternative for the commercial loans for start-ups and SMEs because of the flexible requirements and conditions to access credit. There are many private financial institutions that provide microfinance through international grants such as FINCA, The National Microfinance Bank (NMB), The Women Microfund, and Al-Ahli Microfinance Company.
Roadmap for Future
Moving forward, there is a persistent need for early stage financial support and seed funding for green entrepreneurship, start-ups, and SMEs in Jordan. A green fund for youth entrepreneurs and start-ups will promote green business, encourage youth to come up with clean technologies and innovations, and improve the financial accessibility for green start-ups and SMEs.
Government and international organizations should work together on establishing green funding mechanisms by advocating globally, enabling the environment, and setting the rules and regulations that allow for such mechanisms to take place. The lack of accessible green finance for youth entrepreneurs will have negative implications on the employment rates and the willingness to innovate in solving water and energy problems.