The European Investment Bank (EIB) makes available USD 425m in debt and risk sharing instruments
The initiative represents a coordinated effort with the European Union and forms part of Team Europe’s overall response to the Covid-19 crisis, which aims to support sustainable social and economic recovery of the region. It also falls under the EU-EIB Economic Resilience Initiative (ERI), which is part of the European Union’s response to the challenges in the Southern Neighbourhood and, amongst its primary objectives, intends to promote private sector development through the support to small and medium-sized enterprises (SMEs) as key players for generating economic growth and employment opportunities in Palestine.
Today, the EIB signed three lines of credit with Bank of Palestine, Quds Bank and Palestine Investment Bank in the amount of USD 50 million, USD 32 million and USD 20 million , respectively, which will be on-lent to local SMEs. The EIB also signed a Letter of Intent with the Palestine Monetary Authority (PMA) with a view to making available USD 200 million, which will contribute to the PMA’s efforts to provide financial relief to local SME’s impacted by the coronavirus crisis.
Alongside the financial support, the EIB is also committed to provide a comprehensive technical assistance programme aiming to support the development of an inclusive financial sector and to reduce asymmetry of information between banks and SMEs, thus improving access to finance in general and in particular for underserved and vulnerable groups of the economy, including SMEs impacted by Covid-19 crisis, start-ups, women- and youth-owned businesses.
Today, the EIB signed also a loan agreement with Vitas Palestine in the amount of USD 3.3 million. The loan is expected to reach out to about 1,200 micro-entrepreneurs in Palestine and comes as a top-up of the USD 5 million facility signed in December 2017. It aims to improve the resilience of the micro-finance sector to cope with the economic impact of the Covid-19 pandemic. It is part of EIB operations under the EU Risk Capital Facility for the Southern Neighbourhood (RCF).
These agreements were signed in the presence of H.E. Dr. Mohammad Shtayyeh, Prime Minister of Palestine, and H.E. Firas Milhem, Governor of the Palestine Monetary Authority, as well as H.E. Sven Kühn von Burgsdorff, the European Union Representative to Palestine on the occasion of the second EU – Palestine Investment Platform.
Prime Minister Dr. Muhammad Shtayyeh said during the signing ceremony; “This is a significant, timely agreement that intersects with the Palestinian government’s goals and priorities to support and strengthen the private sector, especially SMEs that have been affected by the Covid-19 pandemic. We thank the EU and the European Investment Bank for this strategic partnership. Europe has always been on the side of Palestine politically while providing economic support and building the institutions, in order to establish an independent and sovereign Palestinian state along the 1967 borders with East Jerusalem as its capital”.
Commenting on the above transactions, Werner Hoyer, the EIB President, said: “Small and medium companies account for 95% of the Palestinian economy and play a vital role in creating and safeguarding employment, especially for young people and women. This comprehensive package will enhance access to much-needed financial support for Palestinian private sector in the midst of the current, unprecedented crisis. As the EU Bank and a key contributor to Team Europe, we value our partnership with local intermediaries who will implement the schemes with us.”
The European Union Representative, Sven Kühn von Burgsdorff said: “Six months after the first meeting of the EU-Palestine Investment Platform, I am very pleased to witness today a historic signature ceremony dedicating support to the Palestinian private sector with an unprecedented amount of finance and through innovative instruments. This support comes in a period when Palestine is going through a difficult time and it demonstrates that in spite of the many challenges Palestine does offer viable business opportunities worth investing in. This package of financing will contribute to strengthening the Palestinian economy, contributing to economic independence, prosperity and welfare.“
The European Investment Bank (EIB) is one of the leading development finance players in the Mediterranean region. The Bank’s goal is to support economic and social development by improving people’s living conditions. EIB aims to establish a tangible presence in the partner countries, focusing on the economic and social priorities of the beneficiary countries to which it not only contributes its financing capacity but also adds value in project implementation and modernisation of public policies through its technical and financial expertise and advisory services.
The Southern Neighborhood Microfinance Facility (SNMF) provides access to equity and debt financing to MSMEs in the Mediterranean region in order to support private sector development, inclusive growth and private sector job creation. It is a EUR 71.3 million facility which supports investments in microfinance markets in Southern Neighborhood countries. The facility blends EIB’s own resources with the European Commission resources under the Neighborhood Investment Facility.
The Economic Resilience Initiative (ERI), approved by the EU Member States in 2016, consists of an integrated package of loans, concessional finance and innovative instruments designed to enable financing of an additional EUR 15 billion of investments on top of schemes already planned.
The European Investment Bank (EIB) and Bank of Palestine join forces to support the resilience of the Palestinian private sector with a $50 million line of credit made available to Bank of Palestine to be on-lent to local private businesses, focusing on small and medium-sized enterprises (SMEs).
The European Investment Bank (EIB) and Palestine Investment Bank join forces to enhance access to finance to Palestinian private sector with a $20 million line of credit to be on-lent primarily to local small and medium-sized enterprises (SMEs).
The European Investment Bank (EIB) has signed a financing contract of $3.3 million with Vitas Palestine to finance microentrepreneurs in the West Bank and Gaza. The EIB financing forms part of Team Europe’s response to the COVID-19 pandemic. This new financing would help support about 1 237 microentrepreneurs, of whom 30% are women.