EBRD and IFC Invest in Bank of Palestine to Strengthen Palestinian Economy Amid Crisis

EBRD and IFC Invest in Bank of Palestine to Strengthen Palestinian Economy Amid Crisis

(IN BRIEF) The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) have acquired equity stakes in Bank of Palestine to support its capital base amid the challenging economic conditions in the region. The investment will help the bank, which is the largest financial institution in the West Bank and Gaza, to continue its work in financial inclusion, particularly for small and medium-sized enterprises (SMEs), women, and young entrepreneurs. This move is part of a broader effort to stabilize and potentially grow the Palestinian economy, which has been severely impacted by the ongoing conflict in Gaza.

(PRESS RELEASE) LONDON, 28-Aug-2024 — /EuropaWire/ — In a significant move to support the stability and growth of the Palestinian economy, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) have acquired equity stakes in Bank of Palestine, the largest financial institution in the West Bank and Gaza. This strategic investment is designed to fortify the bank’s capital base during a critical period, enabling it to continue its vital work in financial inclusion and regional expansion.

As part of the agreement, Bank of Palestine will issue new shares, with the EBRD securing up to 3.92% of the equity and the IFC acquiring up to 5%. This infusion of capital is intended to strengthen the bank’s ability to support small and medium-sized enterprises (SMEs), as well as initiatives aimed at empowering women and young entrepreneurs in the region.

The Palestinian economy has faced severe challenges following the onset of conflict in Gaza in October 2023, with economic activity expected to contract significantly. The EBRD’s investment underscores its commitment to the region, aiming to ensure that Bank of Palestine remains a cornerstone of the local economy and is well-positioned to drive future recovery efforts.

Francis Malige, Managing Director for Financial Institutions at the EBRD, emphasized the importance of this partnership: “This investment reaffirms our dedication to the Palestinian economy. Bank of Palestine is not only crucial to the Palestinian banking sector but is also a vital force in the broader economic landscape. By bolstering the bank’s capital, we are helping to lay the groundwork for economic recovery and long-term growth.”

Hashim Shawa, Chairman of Bank of Palestine Group, hailed the investment as a vote of confidence in the bank’s future: “The involvement of the EBRD and IFC as strategic investors sends a powerful message of hope and partnership. Their support will enhance our capacity to contribute to the necessary economic recovery and signals strong faith in our vision for regional expansion. We are grateful for their trust and are excited about the opportunities this collaboration will bring.”

The EBRD has been active in the West Bank and Gaza since 2017, with 27 approved transactions totaling €142 million. This latest investment marks a continuation of the EBRD’s efforts to foster economic resilience and growth in the region.

Media Contact:

Tel: (+44) 020 7338 6000
Email: media@ebrd.com

SOURCE: EBRD