(Source: European Investment Bank)
- EIB Vice President and EU Representative confirm first dedicated financial support package for Gaza during visit and outline details of the financing scheme containing loans, grants and guarantees
- Palestine Financial Sustainability Programme is set-up together with the Palestine Monetary Authority to improve access to finance, strengthen economic resilience and share financial best practice
- New financing to help Gazan companies recover from several recent crises, COVID, expand and create jobs as part of a first ever credit facility of this size offered by the EIB to a Palestinian public institution
Access to finance by companies in Gaza will be enhanced by a EUR 60 million support programme formally announced by European Investment Bank Vice President Gelsomina Vigliotti and European Union Representative Sven Kühn von Burgsdorff in Gaza earlier today.
The new scheme designed to sustain employment and reinforce economic resilience was announced during a visit to Gaza by multiple European Union Ambassadors.
New investment by companies across Gaza will be supported by USD 50 million of new business financing, made available to local financial institutions by the Palestine Monetary Authority, under a broader EIB lending initiative covering the West Bank and Gaza.
This will be accompanied by EUR 8 million of portfolio guarantees and EUR 5 million of incentive grants by the European Union, that will both enable more entrepreneurs and smaller companies in Gaza to access finance and strengthen lending activities by local financial institutions and to enhance business investment and financial capabilities of local businesses.
The financing will be channelled through Palestine’s flagship economic recovery programme called ‘Estidama’ by the Palestine Monetary Authority. The PMA has been instrumental in promoting sustainable economic development through this fund and with the current support of the EU and the EIB will substantially expand its activities in Gaza.
“Improving access to finance by entrepreneurs and businesses here in Gaza is crucial to create jobs, strengthen economic resilience and increase private sector investment. The new cooperation between the Palestine Monetary Authority, the European Investment Bank and the European Union will transform investment, unlock dedicated financing for young entrepreneurs and help local companies to harness new business opportunities. It is an honour for myself and Gaza business leaders to welcome Vice President Vigliotti, European Union Representative Sven Kühn von Burgsdorff and European Union Ambassadors to Gaza.” said PMA representative Dr. Rafat Al Araj.
“The European Investment Bank, the EU Bank, is committed to supporting private sector investment here in Gaza, improving access to finance by entrepreneurs by backing new credit lines with local banks and unlocking investment to enhance economic resilience. Businesses and entrepreneurs in Gaza will benefit from USD 50 million new financing and a dedicated EUR 13 million support package under the Palestine Financial Sustainability Programme. This represents the first dedicated European Investment Bank support for Gaza business investment.” said Gelsomina Vigliotti, Vice President of the European Investment Bank.
“Gaza has been through difficult times recently, experiencing the economic fall-out of COVID, the hostilities in May last year and rapidly increasing food, energy prices now. The initiative we present today will support economic recovery and reconstruction efforts across the Gaza Strip. It will help expand much needed financing for investments by Gazan businesses and create job opportunities for its people. I underline though that the sustainability of Gazan recovery is not only an economic endeavor, it must be backed by an accompanying political process and dialogue.” said Sven Kühn von Burgsdorff, European Union Representative.
Gaza business financing unveiled during European Union visit
The announcement was made during the first high-level visit to Gaza by the European Investment Bank, the world’s largest international public bank, since the start of the COVID-19 pandemic.
Political and financial partners were joined by European Union Ambassadors and business representatives at the event.
Team Europe enhancing access to finance in Gaza
The new Team Europe support for private sector investment in Gaza is part of broader financial backing provided by the European Investment Bank to the Palestinian Monetary Authority.
Business investment in Gaza will also benefit from portfolio guarantees, incentive schemes and technical assistance to enable a more inclusive financial sector to enhance access to finance by underserved segments of the economy, such as start-up companies, female led business, young entrepreneurs and businesses in sectors most impacted by the COVID-19 pandemic.
Financing under the new initiatives will be provided through the Palestine Monetary Authority in US dollars and channeled to businesses through participating local financial institutions.
Strengthened EIB regional engagement
Vice President Vigliotti visited Gaza on the first day of a six day regional visit.
On Sunday Vice President Vigliotti and EIB President Werner Hoyer will formally open the EIB’s first permanent representation to the West Bank and Gaza.
The ‘Palestine Financial Sustainability Programme’ is a joint undertaking of the EU, EIB and PMA, which aims to increase the financing available for the private sector in order to enhance competitiveness, promote business expansion and enable MSMEs to modernise their businesses. The primary objective of the Programme is to enhance access to finance for MSMEs operating in Palestine, with a focus on Gaza.
EIB Global is the EIB Group’s new specialised arm dedicated to increasing the impact of international partnerships and development finance. EIB Global is designed to foster strong, focused partnership within Team Europe, alongside fellow development finance institutions, and civil society. EIB Global brings the Group closer to local people, companies and institutions through our offices across the world.