Survey of Energy Services Industry in Jordan

SURVEY OF ENERGY
SERVICES INDUSTRY IN
JORDAN
December 2013
This publication was produced for review by the United States Agency for
International Development. It was prepared by Dr. Hameed Nezhad and Isam
Mustafa
SURVEY OF ENERGY
SERVICES INDUSTRY IN
JORDAN
USAID JORDAN ENERGY SECTOR CAPACITY BUILDING

CONTRACT NUMBER: AID-0AA-I_13-00018
TASK ORDER NUMBER: 278-TO-13-0003
DELOITTE CONSULTING LLP
USAID/ ECONOMIC DEVELOPMENT AND ENERGY OFFICE (EDE)
DECEMBER 2013
AUTHOR: DR. HAMEED NEZHAD & ISAM MUSTAFA
DELIVERABLE NO.: 3.1.1
DISCLAIMER:
The authors views expressed in this publication do not necessarily
reflect the views of the United States Agency for International
Development or the United States Government.
USAID JORDAN Energy Sector Capacity Building i

Table of Acronyms
Acronym Term
CHP Combined Heat and Power
DSM Demand-side Management
EE Energy Efficiency
EEC Energy Efficiency Contractor
ESCB Energy Sector Capacity Building Activity
ECM Energy Conservation Measures
ESCO Energy Service Company
ESP Energy Service Provider
EMCs Energy Management Companies
EMS Energy Management Services Int.
ECOSOL Eco Engineering and Energy Solutions
ETAMAX ETA-MAX Energy & Environmental Solutions
GREEN GreenTech
IDRC Interdisciplinary Research Consultants
JCA Jordan Contractors Association
JCC Jordan Climate Change Consultancy Co
JD Jordanian Dinar
JSMO Jordan Standards and Metrology Organization
LLCs Limited Liability Companies
MEMR Ministry of Energy and Mineral Resources
MILL Millennium Energy Industries
NAESCO National Association of Energy Service Companies
NERC National Energy Research Center
PAP Public Action Project
PV Photovoltaic
RE Renewable Energy
RSS Royal Scientific Society
SEES Sustainable Environmental and Energy Solutions
TERRA Terra Vertis
USAID United States Agency for International Development
USAID JORDAN Energy Sector Capacity Building ii

Contents
EXECUTIVE SUMMARY ............................................................................................ 4
1. SURVEY DESIGN .................................................................................................. 6
2. ANALYSIS OF THE SURVEY ................................................................................ 7

1. NUMBER OF EMPLOYEES AND THEIR POSITIONS WITHIN ESCOS7
2. PRINCIPAL ACTIVITIES OF ESCOS 8
3. TYPES OF ENERGY EFFICIENCY PROJECTS IMPLEMENTED BY ESCOS.9
4. TYPES OF CONTRACTS USED BY ESCOS10
5. SOURCES OF FINANCING..10
6. ASSESSMENT OF ENERGY EFFICIENCY MARKET IN JORDAN 11
7. END-USE MARKET POTENTIAL IN BUILDINGS IN JORDAN..12
8. END-USE MARKET POTENTIAL IN INDUSTRIES IN JORDAN 13
9. BARRIERS TO ENERGY EFFICIENCY COMMERCIALIZATION IN JORDAN 14
10. CRITICAL SUCCESS FACTORS FOR ESCOS IN JORDAN 15
11. ESCO RISK FACTORS 15
12. TYPES OF CONTRACTS PREFERRED BY ESCOS .16
13. THE ROLE OF NATIONAL AND INTERNATIONAL FINANCIAL INSTITUTIONS IN
ACCELERATING ENERGY EFFICIENCY COMMERCIALIZATION IN JORDAN 17
14. TRAINING NEEDS.18
15. ESCO ACCREDITATION..19
16. ESCO ASSOCIATION MEMBERSHIP 19
CONCLUDING REMARKS....................................................................................... 20
3. APPENDIX
A1 LIST OF SURVEY RESPONDENTS..21
A2 DEFINITION OF TERMS..23
A3 SAMPLE SURVEY 27
USAID JORDAN Energy Sector Capacity Building iii

EXECUTIVE SUMMARY
Energy Service Companies (ESCOs) have played a major role in the past three decades in
reducing the energy intensity in many countries around the world. Although they may be
called by different names in different countries, they all share the same mission of increasing
energy efficiency in all sectors of the economy and helping countries and economic regions to
decouple energy growth from economic growth rate.
According to the National Association of Energy Service Companies (NAESCO

http://www.naesco.org), an American Association of ESCOs, an Energy Service Company
typically offers the following services:
develop, design, and arrange financing for energy efficiency projects;
install and maintain the energy efficient equipment involved;
measure, monitor, and verify the project's energy savings; and
assume the risk that the project will save the amount of energy guaranteed.
NAESCO offers three categories of Accreditation for companies in the energy service
business:
Energy Service Company (ESCO),
Energy Service Provider (ESP), which includes ESCO activities plus energy supply
options such as CHP and distributed generation, including RE.
Energy Efficiency Contractor (EEC) which normally concentrate on one energy
efficiency measure such as lighting. In most cases, they are sub-contractors to ESCOs.
The Chinese calls these companies Energy Management Companies or EMCs which are
involved in many activities of ESCOs.
In Jordan, there are ten companies that call themselves Energy Service Companies. Although
most of them do not fit the ESCO definition of NAESCO, but all provide energy services in
Jordan.
Due to rapid development of renewable energy sources, particularly solar hot water system,
solar photovoltaic (PV) system, and wind energy system, many ESCOs, particularly Jordanian
ESCOs are increasingly involved in renewable energy projects in addition to the energy
efficiency projects. This may lead to a new definition of ESCOs in Jordan and new ways of
accreditation of these companies.
There are great opportunities to minimize use of primary energy sources in Jordan through
effective energy efficiency measures and expanded use of renewable resources, particularly
solar energy. ESCOs that are currently implementing EE & RE projects are expected to play a
critical role in promoting and implementing such measures in Jordan. However, there are still
many obstacles that must be removed before ESCOs can operate profitably in this country.
To learn more about the activities of Jordanian ESCOs, their needs and concerns about the
energy markets in Jordan, structured interviews were conducted with ESCOs currently
operating in Jordan. These interviews were followed by a survey questionnaire.
The main objectives of the survey were:

USAID JORDAN Energy Sector Capacity Building 4
1. To inquire about past and present activities of existing ESCOs.
2. To identify the critical success factors of ESCOs.
3. To explore challenges and opportunities for energy efficiency and renewable energy
markets.
4. To identify training needs of ESCOs.
5. To identify other needs such as access to financing, equipment, and other resources.
6. To seek advice from survey respondents on ways and means to further develop energy
efficiency and renewable (EE & RE) markets for ESCOs. In particular, what should be
the role of ESCOs, the government, and both domestic and international funding
agencies in accelerating development of EE & RE markets
This report is a summary of the survey process and analyses of the responses.

SURVEY OF ESCO INDUSTRY IN JORDAN
1 SURVEY DESIGN
A survey of ten Jordanian energy service companies (ESCOs) was conducted from October
through November, 2013. All ten ESCOs responded to this survey. Appendix A1 includes a list
of survey respondents.
The questions were divided into four major sections as follows:
I. General information about the company (organization)

II. Activities of the company
III. Their assessments of the energy efficiency & renewable energy market in Jordan
IV. Their opinions about the energy efficiency & renewable energy issues in Jordan and their
recommendations on EE &RE markets.
Appendix A2 provides definition of terms used in the surveys and Appendix A3 includes the
sample survey.
The survey process was as follows:
1. A survey questionnaire was developed targeting Jordanian ESCOs;
2. Interviews were conducted with eight ESCOs to test the questionnaire and make the
necessary revisions to make it more useful and user-friendly;
3. Revised questionnaires were sent to all ESCOs via email;
4. The responses were tabulated using Excel spreadsheets; and finally
7. The responses were analyzed.

2 ANALYSIS OF THE SURVEY
The following sections summarize the responses from the ESCO survey.
GENERAL INFORMATION
All except two ESCOs surveyed are Limited Liability Companies (LLCs), one is a non-profit
organization and one of a general partnership. ECOs reported registered capital ranges from
as low as 10,000 JD to as high as 575,000 JD. The cost per project for the ESCOs ranged
from 500 JD to 1,448,523 JD in 2011; and in 2012, from 85,000 JD to 1,574,585 JD. Most
ESCOs reported a growth in their business in 2012 compared to 2011.
1. NUMBER OF EMPLOYEES AND THEIR POSITIONS WITHIN ESCOS
Table 1 shows breakdown of ESCO employees by gender, position and technical expertise.
The positions reported are dominated by managers followed by marketing staff and
accounting/financial staff. About 20% of the employees are female.
TABLE 1: NUMBER OF POSITIONS WITHIN ESCOS

Positions Male Female
Managers 22 4
Marketing & Sales Staff 15 3
Accounting/Finance 11 5
Other Staff 1 P.R. 5 Office assistant
Other Staff 1 Bidding
Other Staff 2 Driver
Other Staff 2 2 Green Bldg
Total: 54 19 73
Technical Staff
Energy Managers/Energy
Auditors Certified Not Certified
Male Female Male Female
Electrical Engineers 19 1 7 3
Mechanical Engineers 27 3 4 1
Chemical Engineers 1 3 1 1
Other Technical Staff* 10 1 2
Total Technical Staff 57 7 13 7 84
Total Employment by ESCOs 157
* Includes other engineering and scientific disciplines

2. PRINCIPAL ACTIVITIES OF ESCOS
Most of the ESCOs that responded to our survey are involved in engineering design followed
by detailed energy audits, installation services, consulting and training. Very few provide
financing or do customer qualification for ESCO services. If they do provide financing, it is for
small projects and the financing term is for less than one year. Figure 1 shows ESCO types of
services.
FIGURE 1: ESCO TYPES OF SERVICES
10
9
8
7
6
5
4
3
2
1
0
Types of services SEES EMS NERC ECO ETA Green Terra JCC Mill IDRC TOTAL
Operation & Maintenance 1 1 1 1 4
Installation services 1 1 1 1 1 1 1 1 8
Construction 1 1 1 1 4
Equipment procurement 1 1 1 1 1 1 1 7
Engineering Design 1 1 1 1 1 1 1 1 1 9
Detailed Energy Audits 1 1 1 1 1 1 1 1 8
Customer Qualification 1 1
Business Development 1 1 1 1 4
Financing 1 1 1 1 4
Research & Development 1 1 1 1 1 1 6
Consulting 1 1 1 1 1 1 1 1 8
Training 1 1 1 1 1 1 1 1 8

3. TYPES OF ENERGY EFFICIENCY PROJECTS IMPLEMENTED BY ESCOS
The projects implemented by ESCOs are dominated by lighting, pumps, motors and motor
systems, solar hot water systems and PV systems. Figure 2 illustrates the types of energy
conservation measures (ECM) implemented by ESCOs.
FIGURE 2: TYPES OF ECMS IMPLEMENTED BY ESCOS
9
8
7
6
5
4
3
2
1
Types of Measures SEES EMS NERC ECO ETA Green Terra JCC Mill IDRC TOTAL
HVAC 1 1 1 1 1 1 1 7
Lighting System 1 1 1 1 1 1 1 1 8
Building Envelop Weatherization 1 1 1 1 1 5
Pumps, Motors & Motor System 1 1 1 1 1 1 1 1 8
Boilers/Burners 1 1 1 1 1 5
Power Generation Equipment 1 1 1 1 1 5
Power Distribution Equipment 1 1 2
Solar Hot Water Heating System 1 1 1 1 1 1 1 1 8
Building Automation Equipment 1 1 1 1 1 1 6
Thermal Energy Storage Equipment 1 1 1 1 1 5
PV Systems 1 1 1 1 1 1 1 1 8
Wind Generation System 1 1 2
Heat Recovery 1 1 1 3

4. TYPES OF CONTRACTS USED BY ESCOS
As the following Figure 3 shows, nine ESCOs are paid on a fee for service basis with no
payment based on energy or cost savings. However, surprisingly, five ESCOs have done
guaranteed savings and three have done shared savings contracts.
Figure 3: Types of ESCO Contracts
5. SOURCES OF FINANCING
Nine ESCOs indicated that their projects are financed by the customer. Six ESCOs reported
that they provide financing to their customers and five ESCOs reported that their projects were
funding through grants. The donor was USAID, Public Action Project (PAP). This is illustrated
in Figure 4 below.

FIGURE 4: SOURCES OF FINANCING
Customer
2 1
3 9 Your company
Equipment
manufacturers
5
Commercial bank
2 6 Development bank
3 2
Grant
6. ASSESSMENT OF ENERGY EFFICIENCY MARKET IN JORDAN
The following figure shows ESCOs perceptions of the technical and market potential for
energy efficiency in Jordan. The wide range of estimates and inconsistencies in responses
clearly indicate the need for a reliable, systematic and quantitative assessment of both
technical and market potential in Jordan before deciding on the target market and energy
efficiency measures. The ESCOs assessment of the energy efficiency potential indicates that
most of the potential is in the commercial sector, followed by the institutional/public sector and
industrial sector. Most ESCOs ranked residential and agricultural sectors the lowest for market
potential.
The Market Assessment study to be conducted under this task will provide more reliable
quantitative data on market potential in energy efficiency in Jordan. In this study a survey of
consumers in different sectors will be conducted to determine market potential for EE & RE in
each sector broken down by sector and by end uses.

FIGURE 5: ESCOS PERCEPTIONS OF THE ENERGY EFFICIENCY
POTENTIAL IN JORDAN
45
40
35
30
25
20
15 Technical Potential
10 Market Potential
5
0
Scale: Very High=50, High= 40, Moderate= 30,Low =20, and Very Low=10
7. END-USE MARKET POTENTIAL IN BUILDINGS IN JORDAN
The ESCOs perception of the market potential in buildings seems to vary depending on their
past experience and interest in this sector, as can be seen from figure 6 below. However, most
ESCOs believe that hotels, hospitals, and office buildings are good targets followed by
shopping malls and educational facilities. The wide range of estimates by ESCOs and their
inconsistencies clearly show lack of reliable quantitative estimates of market potential for
energy efficiency in buildings.

FIGURE 6: ENERGY EFFICIENCY POTENTIAL IN BUILDINGS IN SELECTED
DMCS
40
35
30
25
20
15
10
8. END-USE MARKET POTENTIAL IN INDUSTRIES IN JORDAN
Very few Jordanian ESCOs have experience with industries. Several ESCOs have provided
technical assistance to industries as energy auditors. As shown in Figure 7, most ESCOs rated
food and beverages very high compared to other industries. This industry was followed closely
by pulp and paper, cement and electric utility as having significant market potential for ESCO
operations.
FIGURE 7: ENERGY EFFICIENCY POTENTIAL IN INDUSTRIES IN JORDAN

35
30
25
20
15
10
5
0

9. BARRIERS TO COMMERCIALIZATION OF ENERGY EFFICIENCY AND RENEWABLE
ENERGY TECHNOLOGIES AND ESCO DEVELOPMENT IN JORDAN
There was no consensus on individual barriers among ESCOs as it is shown in Figure 8.

However, overall responses could be divided into three categories: 1) significant barriers, 2)
somewhat a barrier, and 3) not a barrier.
FIGURE 8: BARRIERS TO ENERGY EFFICIENCY COMMERCIALIZATION IN

JORDAN
Is a significant Barrier Is somewhat a Barrier Is not a Barrier
10
9
8
7
6
5
4
3
2
1
0
NOTE: The vertical axis shows number of respondents
Category 1: Significant Barriers
Lack of awareness of benefits of energy efficiency measures and renewable technologies,

Difficulty of access to funds at affordable rates and terms, and
Ineffective government energy & environmental policies.
Category 2: Somewhat a Barrier
High costs of renewable energy products,

High costs of energy efficient products,
Difficulty to access high quality products & services,
Low market potential for bankable energy efficient products & services, and
Low potential for ESCO profits.

Category 3: Not a barrier
There was no consensus on the rest of the barriers. Most ESCOs rated the following barriers
either somewhat a barrier or no barrier.
Low electricity tariff and low energy prices,

High risks associated with energy efficiency and renewable business, and
Lack of appropriate ESCO-personnel skills.
10. CRITICAL SUCCESS FACTORS FOR ESCOS
As shown in the following figure, ESCOs believe that financial capacity of ESCO and ease
of access to favorable financing are the most important indicators of their business
success. This is a good reflection of ESCOs difficulty and frustration in obtaining financing for
energy efficiency projects. The second set of important factors are technical expertise and
reputation & credibility of ESCOs with their customer, financiers, vendors, government
& utilities. Surprisingly, marketing skills and entrepreneurship skills were rated low by most
ESCOs. Based on our observations, most ESCOs in Jordan have strong technical skills, but
they lack entrepreneurial skills.
FIGURE 9: CRITICAL SUCCESS FACTORS FOR ESCOS
11. ESCO RISK FACTORS
There was no consensus among ESCOs about their perceptions of risks which affect their
business. However, as the following figure shows, regulatory risk and customer credit
risk were ranked as the highest risk factors. The top four most important risk factors are:

1. Regulatory risk
2. Customer Credit Risk
3. Cash Flow Risk, and
4. Transactions Risk
The respondents comments during our interviews with ESCOs clearly indicate their concern
about numerous risks associated with energy efficiency projects and the critical need for
effective project risk management.
FIGURE 10: ESCO RISK FACTORS
12. TYPES OF CONTRACTS PREFERRED BY ESCOS
Most Jordanian ESCOs prefer the Fee for Service contract as shown in Figure 11. This is
primarily due to the high degree of uncertainty and the risks involved in performance
contracting. However, knowing that the market will not take off unless there is some type of
performance guarantee, a surprisingly large number of ESCOs have shown their interest in
performance contracts, namely guaranteed savings (4) and shared savings (2). Only one
ESCO prefers the European type of contract for providing steam or other types of energy
services to their customers.

FIGURE 11: TYPES OF CONTRACTS PREFERRED BY ESCOS
Type of SEES EMS NERC ECO ETA Green Terra JCC Mill IDRC TOTAL
Contract
Fee for
Service 8
Guaranteed
Savings 4
Shared
Savings 2
"Chauffage"
Contract 1
13. THE ROLE OF NATIONAL AND INTERNATIONAL FINANCIAL INSTITUTIONS IN JORDAN
All ESCOs strongly believe that the most effective way to push the market is for the national
and international financial institutions to create a partnership with local ESCOs. Some ESCOs
(4) also believe that the international financial institutions should be equity investors with local
banks. ESCOs do not believe that the international financial institutions lending to the
government would help them in their market development efforts (see Figure 12).

FIGURE 12: THE ROLE OF NATIONAL AND INTERNATIONAL FINANCIAL
INSTITUTIONS
14. TRAINING NEEDS
The following Table 2 shows training needs of each ESCO. Two training programs
Performance Contracting and Project Management are the most needed programs.
TABLE 2: TRAINING NEEDS OF JORDANIAN ESCOS
Training Needs SEES EMS NERC ECO ETA Green Terra JCC Mill IDRC TOTAL
Performance Contracting 4 10 2 1 2 2 4 1 26
Business Plan Development 3 1 1 1 2 1 1 3 2 15
Marketing Plan Development 2 1 2 2 2 1 1 2 2 15
Project Management 2 3 2 2 1 2 10 1 23
Project Risk Management 2 2 1 2 3 1 1 2 1 15
Accounting/Finance 2 3 1 1 1 8
Energy Auditing & Accounting 4 3 2 3 1 2 1 16
Entrepreneurship skills 4 2 1 7
DSM 2 2 1 1 6
Measurement & Verification 1 3 2 3 3 2 2 1 17
Energy Simulations* 2 2

15. ESCO ACCREDITATION
In response to our question of Which organization is most suitable to accredit ESCOs in

Jordan? most ESCOs believe that an ESCO Association that is going to be formed would be
the most suitable organization to accredit ESCOs. The main reason for this recommendation is
that ESCO association will be closer to the market than any other organization. JEA was
ranked second and MEMR was ranked third as a suitable organization to accredit ESCOs, as
can be seen from figure 13 below.
FIGURE 13: WHICH ORGANIZATION IS MOST SUITABLE TO ACCREDIT

ESCOS IN JORDAN?
16. ESCO ASSOCIATION MEMBERSHIP
In response to our question of Who should be member of ESCO Association? ESCOs

made the following recommendations as illustrated in table 3.

Table 3: Who should be member of Jordanian ESCO Association?
ESCO Association Membership

ESCOs
Energy Service Providers
EE equipment vendors
EE contractors
Energy Management Company
ECMs implementing company
Renewable energy providers
Contractors
All companies in ES and EE
JEA
RSS
NERC
3 CONCLUDING REMARKS
In conclusion, the majority of ESCOs in Jordan at the current time are small and medium-sized
companies. They are typically engineering firms involved in conducting energy audits and
installation and maintenance of energy efficient equipment. Very few provide financing or do
customer qualification. If they do, it is either for small projects or the services were provided
outside Jordan.
Due to high degree of uncertainty and the risks involved in energy efficiency projects, most
ESCOs prefer a Fee for Service type of contract. However, knowing that the market will not
take off unless there is some type of performance guarantee, a surprisingly large number of
ESCOs have shown interest in performance contracts.
All ESCOs believe that the lack of suitable financing mechanisms and ineffective government
policies are the main obstacles to further development of this industry in Jordan. They also
believe that the international financial institutions should either deal directly with ESCOs or
through local banks and not with the government.
Finally, due to rapid expansion of renewable energy markets, most ESCOs are increasingly
involved in renewable energy markets, particularly in solar hot water system and solar PV
system.

APPENDIX
A1: LIST OF SURVEY RESPONDENTS
Company Name Sustainable Environmental and Energy Solutions

(SEES)
Mailing Address P.O. Box 830690 Code 11183 Amman Jordan
Web site www.sees-jo.com
Name of the Manager Dr Amal Hijazi
Email Address info@sees-jo.com
Phone Number Telefax + 9626 5339446
Company Name Energy Management Services Int. (EMS)

Mailing Address P.O.Box: 2457 Amman 11953 Jordan
Web site www.ems-int.com
Name of the Manager Naim Awadallah
Email Address Naim@ems-int.com
Phone Number 00962 6 5538085
Company Name National Energy Research Center (NERC)

Royal Scientific Society (RSS)
Mailing Address P. O. Box 1945, Amman 11941 Jordan
Web site Nerc.gov.jo
Name of the Manager Walid Shahin
Email Address Walid.shahin@rss.jo or w.shahin@nerc.gov.jo

Phone Number 00962 6 5338041
Company Name Eco Engineering and Energy Solutions (ECOSOL)

Mailing Address PO BOX 3984 Amman 11953 Jordan
Web site www.ecosol-int.com
Name of the Manager Eng. Hasan Suboh
Email Address hsuboh@ecosol-int.com
Phone Number +962 6 5330070
Company Name ETA-MAX Energy & Environmental Solutions

Mailing Address 509, CARACAS Center, Yajoz St. Jubeha , Amman,
Jordan
Web site www.eta-max.com
Name of the Manager Dr. Mohammad Al-Dado
Email Address info@eta-max.com, m.dado@eta-max.com

Phone Number 962 6 5333559
Company Name GreenTech

Mailing Address 5547 Amman, 11953 Jordan
Web site www.greentech.ae
Name of the Manager Anas Abdullah
Email Address anas@greentech.ae
Phone Number 06-5526074
Company Name Terra Vertis

Mailing Address POBox 2693 Amman, 11181 Jordan
Web site www.terravertis.com
Name of the Manager Salah Tayeh
Email Address salah@terravertis.com
Phone Number +962777537038
Company Name Jordan Climate Change Consultancy Co (JCC)
2. Mailing Address Tela Al Ali, P. O. Box 4823

11953 Amman, Jordan
3. Web site Www.jordanclimate.com
4. Name of the Managers Two
5. Email Address ayounis@jordanclimate.com
6. Phone Number +96265659432
Company Name Millennium Energy Industries

Mailing Address P.O. Box 5327 Amman 11953 Jordan
Web site www.millenniumenergy.co.uk
Name of the Manager Ennis Rimawi
Email Address ennisr@catalystpe.com
Phone Number +96265855533
Company Name Interdisciplinary Research Consultants (id:rc)

Mailing Address POBox: 13304, Amman 11942
Web site www.idrc-go.com
Name of the Managers Dr. Tarek Tarawneh / General Manager
Dr. Jamal O. Jaber / Chief of Energy Division
Email Address jjaber@idrc-go.com
Phone Number +962 6 5517225
A2: DEFINITION OF TERMS
Energy Service Company (ESCO)
An Energy Service Company (ESCO) is involved in assessing, designing, and implementing

energy efficiency projects using a performance-based contract. In many cases, an ESCO
either finances the project or assists in financing.
Performance Contract (PC)
A Performance Contract guarantees that the cost savings from an energy efficiency
improvement project will pay for the costs of the improvements at a facility. The contract may
take many forms including guaranteed savings and shared savings.
Types of Performance Contracts
Guaranteed Savings
Under a guaranteed savings contract the ESCO guarantees a given value of energy savings.
The customer makes periodic debt service payments to pay off the cost paid to the ESCO for
developing, designing and installing the efficiency measures. If the guaranteed savings level is
not achieved, the ESCO covers the difference between the guaranteed savings and the actual
savings. However, the client keeps any savings above and beyond the guaranteed savings
level unless stated otherwise. This is the most common financing mechanism used in the US
today.
Shared Savings
Under a shared savings contract the customer commits to pay only a percentage of the
realized savings to ESCO for cost of designing, implementing and monitoring the energy
efficiency project. In this type of contract, the customer assumes no financial obligation other
than to pay the ESCO a share of the savings that the project realizes. Thus, the ESCO which
finances the project assumes both project performance risk and customer credit risk. Shared
savings designs are more suitable for projects with short payback periods. This type of contract
is not very common.
Types of ESCO Financing
Chauffage
Under this financing option the customer out-sources the operations of their buildings energy-
using infrastructure for operation by an ESCO. These contracts are typically of long duration
and the contractor provides all associated operation and maintenance requirements. The
ESCO covers all costs of providing the service, and recovers their expenditures in the service
charges paid by the client.
Client self-financing
Under self-financing the customer uses internal funds to purchase the technical upgrades and
the services of the ESCO.
Client commercial loan financing

Under this financing option the client obtains their own commercial loan, without the direct
participation of the ESCO, based on their assets and credit quality.
Leasing
In a leasing contract, ownership of the equipment remains with the equipment provider for
some period of time, with an option to purchase at the end of the lease period.
Third Party Financing

In the third party financing option, performance contracts are usually arranged between three
parties, the ESCO, the customer and the lender. Under the three party arrangement, the
ESCO provides an energy savings guarantee to the customer, the ESCO takes out a loan from
the lender to cover the projects total cost (including principal and interest), and the customers
savings are used to repay the loan. The ESCO normally has ownership of the installed
equipment until the loan is repaid, and provides a guarantee that the energy savings will be
sufficient to repay the loan. The lender decides whether loan insurance or bonding is
necessary to protect against high credit risk.
Vendor financing
Vendor financing is used to purchase equipment and services from a specific vendor. The
vendor may provide the financing and the energy savings guarantee (the vendor can become
the ESCO). Vendor financing may cover the entire or only a fraction of the projects total
investment requirements.
ESCO Risk Factors
Cash Flow Risk

ESCO must have sufficient cash flow to continue its operation. Thus, ESCO must assure that
there is sufficient cash flow from the energy savings to pay off the project debt provided by the
lender. Also, to assure that the customer continues to pay ESCO its share of the cash flow.
Construction Risks
The construction risk relates to the completion of the project on time, within budget, and
according to specifications. This risk factor is particularly important when the construction will
interfere with facilitys operation.
Credit Risk
The credit risk relates to customers ability to meet its obligations for both energy services
payments and loan or lease payments. This is a risk to both the ESCO and lenders.
Operations Risk
Operations risk relate to changes in customer operations which will affect the level of energy
use. A well-defined baseline plan would minimize this risk to ESCO. In general, the end-user
assumes this risk.
Performance Risk
The fundamental feature of a performance contract is that the customer would not make any
cash payments except from the realized savings. In order to meet this requirement, the ESCO
assumes all performance risks associated with developing, financing, implementing, and

operating the project. The ESCOs experience, warranties, the reputation of equipment
manufacturers, the performance history of previous projects are the main methods for
evaluating these risks.
Project development risk

This is the risk that the project wont be implemented even though funds have been spent on
project development. Equity investors in the ESCO mostly bear project development risk.
Regulatory Risk
Regulatory risk relates to changes in laws and regulations related to energy prices, tariffs,
taxes, incentives, etc. None of the parties have control over this risk. Thus it should be shared
by all parties. For example, regarding the energy price risk, the ESCO covers the risk down to
a minimum energy price floor, below which the client accepts the risk. Any benefit accruing
from energy price increases would go to client.
Transactions Risk
Transactions risk could arise from the way project financing is structured in order to guarantee
project performance, measurement and verification, and cash flow.
Essential Skills for Operating Energy Service Company
Project management
Marketing & sales
Energy auditing and accounting
Economics, finance, and accounting
Contracts
Business plan development
Billing and payment procedures
Training
Energy system management
Energy system specification and installation
Energy system operations and maintenance
Energy system evaluation
Knowledge of government policies, and
Negotiation and conflict resolution skills
Energy Efficiency Potential
Technical Potential for Energy Efficiency Improvements:

Technical potential is the maximum technically- feasible energy savings regardless of cost and
market limitations.
Economic Potential for Energy Efficiency Improvements

The economic potential reflects the societal benefits of energy efficiency measures regardless
of market barriers. It is that part of technical potential which has a net positive effect from the
macro-economic perspective.

Market Potential for Energy Efficiency
The market potential is that part of technical potential which is both cost-effective and
considers market barriers in the implementation of energy efficiency measures. It reflects the
micro-economic perspective of the investor. It is normally calculated using payback periods
acceptable to energy consumers. The market potential sets a realistic target for energy
efficiency improvements.
Weatherization
To make a building better protected against weather such as better insulation in the building
envelop, more efficient doors and windows
Thermal Energy Storage

Thermal energy storage refers to a number of technologies that store energy in a thermal
reservoir for later reuse. It allows excess thermal energy (heat or cold) to be collected for later
use, hours, days or many months later, at individual building, multiuser building, or a district.
The sources of thermal energy could be off-peak electricity, excess heat from industrial plants,
or energy from renewable resources.

A3: SAMPLE SURVEY
Energy Sector Capacity Building Program
SURVEY of ESCOs in JORDAN
Objectives of this Survey:
7. To inquire about past and present activities of existing ESCOs in Jordan

8. To identify the critical success factors of ESCOs
9. To explore challenges and opportunities for energy efficiency and renewable energy
markets
10. To identify training needs of ESCOs
11. To identify other needs such as access to financing, equipment, and other resources.
12. To seek advice from survey respondents on ways and means to further develop EE &
RE markets for ESCOs. In particular, what should be the role of ESCOs, the
government, and both domestic and international funding agencies in accelerating
development of EE & RE markets
I. General Information
1. Company Name
2. Mailing Address
3. Web site
4. Name of the
Manager/Contact Person
5. Email Address
6. Phone Number
7. Company Classification
(Please check)
__Limited Liability
__Private Shareholding
__Public Shareholding
__Non Profit
__Other (Please specify)

8. Registered Capital (JD)
9. Total budget for all 2011 ( JD) 2012( JD)

projects(JD)
II. Activities of the Company
1. Number of employees:
Position Number
Managers Male ( ) Female ( )
Marketing & Sales Staff Male ( ) Female ( )
Accounting/Finance Male ( ) Female ( )
Energy Managers/Energy Auditors Certified Not Certified
Gender Male Female Male Female

Electrical Engineers
Mechanical Engineers
Chemical Engineers
Other Technical Staff (Please specify)
Other Staff (Please explain)
2. Which of the following best describe principal activities of your company?

(Please check as many as apply.)
Types of services Select Comments/Explanations

Operation & Maintenance
Installation services
Construction
Equipment procurement
Engineering Design
Detailed audits
Customer qualification
Business development
Financing
Research & development
Consulting
Training
3. Which of the following energy efficiency & renewable energy projects have your
company implemented or is currently implementing?
Types of Measures Selec Where? Jordan or abroad?

t
HVAC
Lighting System
Building envelop
Weatherization
Pumps, Motors & Motor
System
Boilers/Burners
Power Generation Equipment
Power Distribution Equipment
Solar Hot Water Heating
Systems
Building Automation
Equipment
Thermal Energy Storage
Equipment
PV System
Wind Generation System
Other Measures (Please
explain)
Please list the type of Equipment you used in your energy projects:
4. Which type of contract have your company used in your energy services?
Types of Contract Select Comments/Explanations

Fee for Service
Guaranteed Savings
Shared Savings
Other types of contracts (Please
explain)
5. What type of financing have your company used in your energy services? Please
check as many as applies
Sources of Financing Select Comments

Customer
Your Company
Equipment
Manufacturer/Distributor
Commercial Bank
Development Bank
Grant
Leasing company
Equity Investor
Other (Please specify)

6. Success Stories
Please share with us your companys success stories over the last five years. Please feel free
to attach additional documents.
Project Brief Description Project Budget Beneficiary Achievements
III. Your Assessment of Energy Efficiency Market in Jordan
1. Please prioritize the following sectors based on their technical potential for energy
efficiency improvements and market potential for ESCO services in Jordan.
Sectors Technical Potential Market Potential

Rating Rating
Medium
Medium
High
High
High
High
Very
Very
Very
Very
Low
Low
Low
Low
Residential
Commercial
Institutional/Public
Industrial
Agricultural
Water pumping
Other (Please specify)
2. Please prioritize the following end-use targets based on their market potential for
energy efficiency improvements for ESCO services.
Commercial-Institutional Sector
End-Use Targets Market Potential Comments

Rating
Moderat
Very
Very
High
High
Low
Low
e
Apartment buildings
Educational facilities

Hospitals/Health Care
Facilities
Office Buildings
Hotels/Motels
Government Buildings
Municipal Facilities
Retail Stores
Supermarkets/Grocery
Stores
Shopping Malls
Restaurants
Sport Facilities
Cultural/Religious Facilities
Industrial Sector
End-Use Targets Market Potential Comments

Rating
Moderat
Very
Very
High
High
Low
Low
e
Chemical/Fertilizer
Petroleum Refining
Pulp & Paper
Cement
Glass
Rubber/Plastics
Iron & Steel

Electric Utility
Food & Beverages
Central Heating/Boilers
Textiles
Electrical & Electronic

Equipment
Mining
Others (Please specify)
IV. Your Opinion about the Energy Efficiency and Renewable Energy Issues in Jordan
1. Which of the following factors are barriers to commercialization of EE & RE and

ESCO development in Jordan?
Barriers Comments/Justifications
significant
somewhat
a Barrier
Is not a
Barrier
Barrier
Is a
Is
Ineffective government energy &

environmental policies
Low electricity tariff and low energy prices
Lack of awareness of benefits of energy

efficiency measures and renewable
technologies
Difficulty of access to funds at affordable

rates and terms
High risks associated with EE & RE

business
Difficulty to access high quality products &

services
High Costs of EE products
High Costs of RE products

Low market potential for bankable energy
efficient products & services
Low potential for ESCO profits
Lack of appropriate ESCO-personnel skills
2. In your opinion, what are the critical success factors for ESCOs in Jordan?
Critical Success Factors Ratings
Comments
Moderat
Very
Very
High
High
Low
Low
e
Financial capacity
Reputation & credibility with customers,

financiers, vendors, government & utilities
Entrepreneurship skills
Technical expertise in energy efficiency
Marketing skills
Understanding market capacity & needs
Ease of access to favorable financing
Networking with key partners
3. in your opinion, what are the major risks associated with ESCO business in Jordan?
Risk Factors Ratings
Comments
Moderat
Very
Very
High
High
Low
Low
e
Project development risk

Customer credit risk
Transactions risk
Construction risk
Equipment performance risk
Operations risk
Cash flow risk
Regulatory risk
Customer satisfaction risk
Other risks (Please specify)
4. What types of contracts do you prefer?
Types of Contracts Select Comments

Fee for service
Guaranteed savings
Shared savings
'chauffage' contract
5. In your opinion, what should be the role of national and international financial
institutions in Jordan?
Role of financial Select Comments

institution
Lender to government
Equity investor with

government

local banks

ESCOs

energy efficient
products manufacturers
V. Training Needs
What type of training your employees need to provide better energy services? Please
check as many as applies.
Training Needs Select How many Comments/Suggestions

participants?
Performance Contracting
Business Plan Development
Marketing Plan Development
Project Management
Project Risk Management
Accounting/Finance
Energy Auditing & Accounting
Entrepreneurship skills
DSM
Measurement & Verification
VI. ESCO Accreditation

In your opinion which organization is most suitable to accredit ESCOs in Jordan?
Organization Most Suitable Not Suitable Justification

suitable
MEMR
EDAMA
JSMO
JEA
ESCO
Association (to
be formed)
Others
(Please
Specify)

VII. ESCO Association Membership
In your opinion who should be member of ESCO Association?
Name of Organization
We appreciate any additional comments, suggestions and documents

SURVEY OF ENERGY SERVICES INDUSTRY IN
JORDAN
Hameed Nezhad, Ph.D.

Isam Mustafa
December 2013
USAID
CONTRACT NUMBER: AID-OAA-I-13-00018,
TASK ORDER NUMBER: AID-278-TO-13-00003
DELOITTE CONSULTING LLP
USAID/JORDANENERGY OFFICE
USAID Jordan Energy Sector Capacity Building Activity

USAID Jordan
Saqra Energy
BuildingSector Capacity
# 238(C), Building Activity
6th Floor
Saqra Building # 238(C), 6th Floor
Arar Street
USAID JORDAN Energy Sector Capacity
Amman,Arar Street
Building
Jordan 37
Amman, Jordan

Survey of Energy Services Industry in Jordan

Caricato da

Informazioni sul documento

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Survey of Energy Services Industry in Jordan

Caricato da

Copyright:

Formati disponibili

SURVEY OF ENERGY

USAID JORDAN ENERGY SECTOR CAPACITY BUILDING

USAID JORDAN Energy Sector Capacity Building i

USAID JORDAN Energy Sector Capacity Building ii

EXECUTIVE SUMMARY ............................................................................................ 4

1. SURVEY DESIGN .................................................................................................. 6

2. ANALYSIS OF THE SURVEY ................................................................................ 7

USAID JORDAN Energy Sector Capacity Building iii

According to the National Association of Energy Service Companies (NAESCO

The main objectives of the survey were:

USAID JORDAN Energy Sector Capacity Building 5

The questions were divided into four major sections as follows:

I. General information about the company (organization)

The survey process was as follows:

1. A survey questionnaire was developed targeting Jordanian ESCOs;

3. Revised questionnaires were sent to all ESCOs via email;

4. The responses were tabulated using Excel spreadsheets; and finally

7. The responses were analyzed.

USAID JORDAN Energy Sector Capacity Building 6

1. NUMBER OF EMPLOYEES AND THEIR POSITIONS WITHIN ESCOS

TABLE 1: NUMBER OF POSITIONS WITHIN ESCOS

USAID JORDAN Energy Sector Capacity Building 7

FIGURE 1: ESCO TYPES OF SERVICES

USAID JORDAN Energy Sector Capacity Building 8

FIGURE 2: TYPES OF ECMS IMPLEMENTED BY ESCOS

USAID JORDAN Energy Sector Capacity Building 9

Figure 3: Types of ESCO Contracts

USAID JORDAN Energy Sector Capacity Building 10

6. ASSESSMENT OF ENERGY EFFICIENCY MARKET IN JORDAN

USAID JORDAN Energy Sector Capacity Building 11

7. END-USE MARKET POTENTIAL IN BUILDINGS IN JORDAN

USAID JORDAN Energy Sector Capacity Building 12

8. END-USE MARKET POTENTIAL IN INDUSTRIES IN JORDAN

FIGURE 7: ENERGY EFFICIENCY POTENTIAL IN INDUSTRIES IN JORDAN

USAID JORDAN Energy Sector Capacity Building 13

There was no consensus on individual barriers among ESCOs as it is shown in Figure 8.

FIGURE 8: BARRIERS TO ENERGY EFFICIENCY COMMERCIALIZATION IN

Is a significant Barrier Is somewhat a Barrier Is not a Barrier

NOTE: The vertical axis shows number of respondents

Category 1: Significant Barriers

Lack of awareness of benefits of energy efficiency measures and renewable technologies,

Category 2: Somewhat a Barrier

High costs of renewable energy products,

USAID JORDAN Energy Sector Capacity Building 14

Low electricity tariff and low energy prices,

10. CRITICAL SUCCESS FACTORS FOR ESCOS

FIGURE 9: CRITICAL SUCCESS FACTORS FOR ESCOS

11. ESCO RISK FACTORS

USAID JORDAN Energy Sector Capacity Building 15

FIGURE 10: ESCO RISK FACTORS

12. TYPES OF CONTRACTS PREFERRED BY ESCOS

USAID JORDAN Energy Sector Capacity Building 16

13. THE ROLE OF NATIONAL AND INTERNATIONAL FINANCIAL INSTITUTIONS IN JORDAN

USAID JORDAN Energy Sector Capacity Building 17

14. TRAINING NEEDS

TABLE 2: TRAINING NEEDS OF JORDANIAN ESCOS

USAID JORDAN Energy Sector Capacity Building 18

In response to our question of Which organization is most suitable to accredit ESCOs in

FIGURE 13: WHICH ORGANIZATION IS MOST SUITABLE TO ACCREDIT

16. ESCO ASSOCIATION MEMBERSHIP

In response to our question of Who should be member of ESCO Association? ESCOs

USAID JORDAN Energy Sector Capacity Building 19

ESCO Association Membership

USAID JORDAN Energy Sector Capacity Building 20