The European Investment Bank (EIB) is providing a total of EUR 8 million (1) to support the Palestinian private sector. Financing Agreements were signed yesterday in Ramallah by Mr. M. Masri, Minister for Trade and Economy and Chairman of the Palestinian Banking Corporation (PBC).
The funds, on risk capital resources out of the European Community Budget, are being made available by the EIB, the European Union's long-term financing institution, under the "Euro-Med Partnership" as follows:
- EUR 6 million is being made available to the Palestinian Banking Corporation in the form of a global loan for financing small and medium private undertakings. The funds will be channelled as equity and quasi-equity capital to small and medium enterprises (SMEs) operating in the industrial, agro-industrial, tourism and services. The funds will strengthen the financial base of the SMEs and allow them to grow and develop exports and jobs. Remuneration of the funds will be linked to the performance of the enterprises.
- Additionally the EIB is taking an EUR 2 million direct equity participation in the PBC's share capital. EIB is acting on behalf of the European Union. The operation is to strengthen the capital structure of an important Palestinian development finance company, formerly known as the Palestinian Development Fund (PDF), which grew out of an amalgamation of a number of Palestinian NGO Credit Agencies set up in the 1980's. Restructured in 1999 with the aim of fostering economic development by promoting long-term financing and providing other services to the Palestinian private sector, PBC has also established a cooperation with the Cyprus Development Bank (CDB), in which the EIB has also a direct equity participation.
The European Investment Bank (EIB) 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 EIB.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.
(1) Conversion rates: EUR 1 = GBP 0.647500, USD 1.0650.