The European Investment Bank (EIB) is lending a total of ECU 62 million (1) to support the development of Palestinian investment in hotel, water and transport infrastructure in West Bank, and which will, at the same time, benefit the Bethlehem 2000 celebrations. The funds from the EIB, the European Union's long-term financing institution, are made available under the 1997-1999 "Euro-Med Partnership" mandate. The financing agreements were signed yesterday in Gaza and Bethlehem:
Financing agreements totalling ECU 50 million for water and transport infrastructure were signed by Mr Mohammed Nashashibi, Finance Minister and Ms Ariane Obolensky, EIB Vice-President. The funds are made available to the Palestinian Authority, as follows:
- Water: ECU 30 million goes to the Palestinian Water Authority (PWA), for developing the water resources in the Southern West Bank. Costed at ECU 65 million in total, the investments aim at increasing the supply of potable water, reducing water losses, and improving the general service network, mainly around the Hebron - Bethlehem area. When completed by end-2002, they will serve some 350 000 Palestinian inhabitants. As part of the reform, private sector participation will also be introduced into the operation of the water system following a similar, successful operation in Gaza. The investments include some complementary components, to be financed by other donors, such as France, the United Kingdom and the IBRD.
- Roads: ECU 20 million is to be used under the project supervision of the Palestinian Economic Council for Development and Reconstruction (PEDCAR), for the rehabilitation of existing roads, encompassing some 36 schemes in the West Bank with a total length of some 154 km. The schemes mainly aim at improving the links between Palestinian villages and the latter's links with the area's road network.
- Bethlehem Hotel: A financing agreement of ECU 12 million for the renovation and construction of a high quality hotel in Bethlehem was signed by Mr Hathen Al-Halawani, Vice-Chairman, Palestine Tourism Investment Co. Ltd respectively and Ms Ariane Obolensky, EIB Vice-President. The project is co-financed by the IFC. The 250 room hotel in Bethlehem, will be the first Palestinian, privately owned and managed, international hotel in Palestine serving the Holy Land destinations. The developer and borrower is the Palestine Tourism Investment Co. Ltd. (PTICO), a private Palestinian company, majority-owned and controlled by the Palestine Development & Investment Co. Ltd. (PADICO). Other shareholders of PTICO include the Zara Group, the largest hotel owner in neighbouring Jordan, and the Cairo-Amman Bank. The EIB loan is guaranteed by the Arab Bank.
The European Investment Bank (EIB), the European Union's long-term financing institution, operates in the Autonomous Territories of Gaza and the West Bank (GWB) in the framework of a Support Agreement, signed between the Palestinian Liberation Organisation (PLO) and the European Investment Bank (EIB) by President Yasser Arafat and EIB Vice-President, Ms Ariane Obolensky on 27 October 1995 in Gaza.Under the present Euro-Mediterranean Partnership Agreement, the EIB is committed to lend up to ECU 2 310 million during the period 1997-1999 for investment projects in 12 Mediterranean countries. In addition, EIB is able to offer interest subsidies for environmental projects and Risk Capital in the form of equity or quasi-equity, both funded from the EU Budget. In GWB the EIB has financed projects in tourism and industrial development, through financial support to large scale investments, as well as global loans to the banking sector operating in the area for on-lending to small and medium sized enterprises investing in medium to long term productive projects. Economic and public infrastructures have also largely benefited from EIB funding. Support for the environment has in recent years become a major area of EIB activity in Gaza and West Bank, as well as in the Mediterranean region.
The EIB is also co-manager of the "Mediterranean Environmental Technical Assistance Programme" (METAP), which was launched in 1990 to assist Mediterranean countries to find solutions, at a national or regional level, to common environmental problems by developing policy options and mobilising grant resources. METAP opened a Regional Office in Cairo in 1997.
(1) The conversion rates used by the EIB for statistical purposes for the current quarter are those obtaining on 30.09.1998, when ECU 1 = GBP 0.69, USD 1.17159.