Chinese banks on Monday signed agreements with a Jordanian electricity firm to provide $1.6 billion as a loan to finance an oil shale project in Jordan, according to a statement from a Chinese signatory.

The Bank of China, along with the Industrial and Commercial Bank of China (ICBC) will provide the loan to the project, which is owned by Estonian and Malaysian investors.

The oil project has a total capacity of 540 megawatts and will use oil hale for generating electricity, said the statement.

Prime Minister Abdullah Ensour said the plant, which will be located to the south of the capital, will be operational in 2019, according to local media report, adding that the project will increase Jordan's electricity capacity.

He added that the project will create 3,000 jobs for Jordanians.

According to figures by the Ministry of Energy and Mineral Resources, Jordan is home to 40 billion tons of oil shale. Jordan currently imports about 97 percent of its energy needs.

The project, once in place, could lessen the country's dependence on energy imports.