Bank of Palestine receives EBRD, IFC equity injection

The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) are investing in the Palestinian economy under a new equity agreement involving the Bank of Palestine.

Under the agreement, the Bank of Palestine will issue additional shares, with the EBRD acquiring up to 3.92 per cent and the IFC taking up to 5 per cent through primary issuance.

The investment aims to bolster the capital of the Bank of Palestine, the leading financial institution in West Bank and Gaza, and support its regional expansion and financial inclusion efforts.

The bank focuses on small and medium-sized enterprises (SMEs) and the empowerment of women and young people.

The Palestinian economy has been severely impacted by the Israeli ongoing aggression since October 2023, with GDP expected to shrink by 6.5 per cent to 9.6 per cent in 2024 due to job losses and rising security tensions.

“Our aim with this investment is to help Bank of Palestine maintain its position as the leading local institution, leaving it well placed to capture any future growth stemming from reconstruction efforts. Bank of Palestine is not only systemically important to the Palestinian banking sector, but a key pillar of the local economy.” said Francis Malige, the EBRD’s Managing Director for Financial Institutions.

For his part, Hashim Shawa, Chairman of the Bank of Palestine Group, said the EBRD-IFC investment “sends a message of hope and partnership, confidence in the future role that the bank intends to play in the local economy and faith in the bank’s planned regional expansion.”

Since initiating its operations in the West Bank and Gaza in 2017 through a trust fund, the EBRD has approved 27 transactions totaling €142 million.