Palestine: EU, EIB announce €60 million business investment in Gaza
The European Investment Bank (EIB), a financial arm of the European Union (EU), announced Thursday it provides €60 billion ($62.58 billion) for economic development in Gaza.
The financing program was unveiled by EIB Vice President Gelsomina Vigliotti and EU representative Sven Kuhn von Burgsdorff during a visit to Gaza, the EIB said in a press release.
The EIB Vice President and the EU Representative said the first dedicated financial support package for Gaza contains loans, grants and guarantees, adding that the Palestine Financial Sustainability Program is set-up together with the Palestine Monetary Authority to improve access to finance, strengthen economic resilience and share financial best practice
The new financing will help Gazan companies recover from several recent crises, including COVID-19, expand and create jobs as part of a first ever credit facility of this size offered by the EIB to a Palestinian public institution, the press release said.
The financing will be channeled through Palestine’s flagship economic recovery program called ‘Estidama’ by the Palestine Monetary Authority (PMA).
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.
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.
“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,” 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 €13 million support package under the Palestine Financial Sustainability Program. This represents the first dedicated European Investment Bank support for Gaza business investment.” said Vice President of the European Investment Bank Gelsomina Vigliotti.
“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,” said the EU representative Sven Kühn von Burgsdorff.
“It will help expand much needed financing for investments by Gazan businesses and create job opportunities for its people, he said underlining however that the sustainability of Gazan recovery is not only an economic endeavor, it must be backed by an accompanying political process and dialogue.
The ‘Palestine Financial Sustainability Program’ 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 modernize their businesses. The primary objective of the Program is to enhance access to finance for MSMEs operating in Palestine, with a focus on Gaza.