- Financing is part of the European Commission’s Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience, aiming to boost economic stability and job creation.
- EIB facility to strengthen Palestinian local micro, small, and medium-sized enterprises by improving access to affordable financing.
- Partnership with the Palestine Monetary Authority and local financial intermediaries to channel resources to private sector.
After the approval of the European Investment Bank (EIB)’s Board in July, today, the EIB and the European Commission have announced at the UN General Assembly in New York the signature of a €400 million financing facility with the Palestine Monetary Authority (PMA) to support the economic recovery and resilience of the Palestinian private sector.
The operation is structured as an intermediated facility through PMA and local financial institutions and is intended to improve access to finance for micro, small and medium-sized enterprises and Mid-Caps, which form the backbone of the Palestinian economy.
The initiative aims to foster stability and inclusive growth by providing long-term, affordable financial resources to enterprises that have been significantly affected by the ongoing conflict.
The EIB financing will be channelled through local partner banks and microfinance institutions, enabling them to offer loans at favourable terms to eligible businesses.
The facility is a key component of the European Commission’s “Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience”. With a total envelope of up to €1.6 billion over 2025–2027, the programme includes €620 million in grants to support the Palestinian Authority’s, €580 million for concrete projects fostering resilience and recovery in the West Bank and Gaza (when conditions allow), and the EIB’s Facility of €400 million loan guaranteed by the European Commission supporting the Palestinian private sector.
“Palestine’s economic and financial stability is a priority for the European Union, and part of our commitment to a lasting and sustainable peace based on the Two-State solution,” EIB Group President Nadia Calviño said.
“The agreement reflects EIB Group’s support to the Palestinian people and businesses suffering from the conflict and is fully aligned with the EU’s position for an immediate end to this war.”
EU Commissioner for the Mediterranean Dubravka Šuica said: “This significant EIB’s Facility of €400 million, guaranteed by the European Commission, represents our unwavering commitment to a resilient Palestinian economy, society and statehood.
As part of our Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience, this initiative will improve access to affordable financing for local businesses, directly contributing to economic stability and job creation.”
Since 1995, the EIB has provided financing worth some €1 billion in Palestine, as well as risk sharing instruments supporting Palestinian small and medium-sized businesses for an additional €120 million.
Just last year, in the middle of the conflict, the EIB disbursed $192 million to the Palestinian Monetary Authority and €40 million to Bank of Palestine, and signed a loan of €20 million for the construction of a waste-water treatment plant in Ramallah.
“Limited access to financial services remains a key challenge for Palestinian enterprises that struggle, in the current environment, to remain resilient, maintain employment and contribute to economic development,” said EIB Vice-President Gelsomina Vigliotti. “By supporting the local financial sector’s capacity to provide targeted loans, the financing facility can help revitalising private sector activity and supporting Palestinian businesses through the current shortage of funding options.”
Palestine Monetary Authority Governor and Chairman Yahya Jawdat Shunnar said: “This agreement with the European Investment Bank comes at a critical time for Palestine’s private sector.
By expanding access to affordable financing, we are empowering our micro, small and medium-sized enterprises — the backbone of our economy — to preserve jobs, sustain growth, and strengthen resilience in the face of unprecedented challenges.
The Palestine Monetary Authority is proud to partner with the EIB and local financial institutions to ensure that these resources reach businesses and communities, supporting economic stability and the hope of a better future.”
SOURCE
EID Global Newsletter
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