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European Union

European Investment Bank and European Commission Announce €400 Million Financing Facility for Palestinian Private Sector

Strategic Insights

— 2 min read

The European Investment Bank and the European Commission have signed a €400 million financing facility with the Palestine Monetary Authority to support the economic recovery and resilience of the Palestinian private sector. This facility is part of the European Commission's Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience, aiming to boost economic stability and job creation. The EIB financing will be channelled through local partner banks and microfinance institutions, enabling them to offer loans at favourable terms to eligible businesses. The initiative aims to foster stability and inclusive growth by providing long-term, affordable financial resources to enterprises that have been significantly affected by the ongoing conflict.

Key Takeaways:

  • The EIB facility is structured as an intermediated facility through PMA and local financial institutions to improve access to finance for micro, small and medium-sized enterprises and Mid-Caps.
  • The facility aims to provide long-term, affordable financial resources to enterprises affected by the ongoing conflict.
  • The EIB financing will be channelled through local partner banks and microfinance institutions to offer loans at favourable terms to eligible businesses.
  • The facility is a key component of the European Commission's "Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience" worth up to €1.6 billion over 2025-2027.
  • The programme includes €620 million in grants to support the Palestinian Authority, €580 million for concrete projects fostering resilience and recovery, and the EIB's Facility of €400 million loan guaranteed by the European Commission.
  • Since 1995, the EIB has provided financing worth some €1 billion in Palestine, as well as risk sharing instruments supporting Palestinian small and medium-sized businesses for an additional €120 million.
  • The EIB has disbursed $192 million to the Palestinian Monetary Authority and €40 million to Bank of Palestine, and signed a loan of €20 million for the construction of a waste-water treatment plant in Ramallah.

Statistics:

  • €400 million financing facility signed by the EIB and the European Commission with the Palestine Monetary Authority.
  • €1.6 billion programme for Palestinian Recovery and Resilience, including €620 million in grants, €580 million for concrete projects, and €400 million EIB Facility.
  • €1 billion in EIB financing in Palestine since 1995, including €120 million in risk sharing instruments.
  • $192 million disbursed to the Palestinian Monetary Authority and €40 million to Bank of Palestine.
  • €20 million loan signed for the construction of a waste-water treatment plant in Ramallah.
  • EIB aims to support €100 billion of investment by the end of 2027, around one-third of the overall target of the EU's Global Gateway initiative.

Sources:

  • European Investment Bank
  • European Commission
  • Palestine Monetary Authority
  • Contify.com (2017)

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