EIB and EC launch €400m facility to support Palestinian private sector

The European Investment Bank (EIB) and the European Commission have announced the signing of a €400 million financing facility with the Palestine Monetary Authority (PMA) at the UN General Assembly in New York, following the approval of the EIB’s Board in July.

The facility was designed to support the economic recovery and resilience of the Palestinian private sector, which continues to face significant disruption due to conflict and restrictions on movement and trade.

Structured as an intermediated facility, the operation channels EIB funds through the PMA and local financial institutions to improve access to finance for micro, small and medium-sized enterprises (MSMEs) and mid-cap firms. These enterprises constitute the majority of private sector employment in Palestine and are seen as central to stabilising local economic activity.

The financing forms part of the European Commission’s Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience, a €1.6 billion package for 2025–2027 combining grants, investment, and guarantees. Of this, €620 million has been allocated in direct support to the Palestinian Authority, €580 million to project funding in the West Bank and Gaza (when conditions permit), and €400 million through the EIB facility backed by an EU guarantee.

EIB President Nadia Calviño said the agreement aligned with the European Union’s broader objective of supporting “Palestine’s economic and financial stability”. EU Commissioner for the Mediterranean Dubravka Šuica described the facility as a step to “improve access to affordable financing for local businesses” and contribute to employment and resilience.

EIB Vice-President Gelsomina Vigliotti noted that limited access to finance remained a critical challenge for Palestinian enterprises attempting to sustain operations and retain staff. She said the facility aimed to help revitalise private sector activity through increased lending capacity among local financial institutions.

Palestine Monetary Authority Governor Yahya Jawdat Shunnar said the initiative came at “a critical time” for local businesses, providing tools to maintain jobs and support growth under difficult conditions.

Since 1995, the EIB has provided around €1 billion in financing in Palestine, including risk-sharing instruments worth a further €120 million. In 2024, the Bank disbursed $192 million to the PMA, €40 million to Bank of Palestine, and signed a €20 million loan for wastewater infrastructure in Ramallah.

The Palestine Monetary Authority is the independent central institution responsible for regulating and supervising the Palestinian banking and financial sector. Established in 1994, the PMA functions as a modern central bank without a national currency, overseeing financial institutions, managing payment systems, and promoting inclusive financial policies. It plays a central role in safeguarding financial stability and supporting economic resilience across the West Bank and Gaza.