The operation is a part of Team Europe’s overall response to the Covid-19 crisis, which aims to support sustainable social and economic recovery of the region.
The signing ceremony took place at the Prime Minister’s office in Ramallah in the presence of the Palestinian Prime Minister, Dr Mohammad Shtayyeh, PMA Governor, Dr Firas Melhem, EU Representative, Sven Kühn von Burgsdorff, Director for EU Neighbourhood, European Investment Bank, Flavia Palanza via Zoom, TNB Chairman, Samir Zraiq, Vice Chairman Omar Masri via Zoom, Chief Executive Officer Salameh Khalil and representatives of Palestinian banks and microfinance institutions.
Prime Minister Dr. Muhammad Shtayyeh said during the signing ceremony: “This is a significant, timely agreement that intersects with the Palestinian government’s goals and priorities to support and strengthen the private sector, especially SMEs that have been affected by the Covid-19 pandemic. We thank the EU and the European investment bank, for this strategic partnership. Europe has always been on the side of Palestine politically while providing economic support and building the institutions, in order to establish an independent and sovereign Palestinian state along the 1967 borders with East Jerusalem as its capital.”
Commenting on the transactions, Flavia Palanza, Director of Neighbouring Countries Department, said: “We are proud to partner again with The National Bank in the context of this milestone transaction. Thanks to the EU’s financial backing under the EFSD, this instrument will make available vital and much-needed financing for businesses and, ultimately, sustain jobs and strengthen the resilience of the economy in the midst of the current crisis.”
The European Union Representative, Sven Kühn von Burgsdorff said: “Six months after the first meeting of the EU-Palestine Investment Platform, I am very pleased to witness today a historic signature ceremony dedicating support to the Palestinian private sector with an unprecedented amount of finance and through innovative instruments. This support comes in a period when Palestine is going through a difficult time and it demonstrates that in spite of the many challenges Palestine does offer viable business opportunities worth investing in. This package of financing will contribute to strengthening the Palestinian economy, contributing to economic independence, prosperity and welfare“.
Samir Zraiq, Chairman of The National Bank commented: “We are glad to extend our strategic partnership with EIB and partner again within this agreement to fully support the SME sector in Palestine.This instrument is only one component of a comprehensive package which includes a $50 million loan and a technical assistance program. Through this partnership, TNB will be able to expand the financing towards this vital sector, accelerate the recovery of the affected enterprises due to the pandemic, help sustain jobs, reach out to underserved areas and segments, and contribute towards evolving our national economy in resilience of Covid-19.”
The EIB operations are part of a comprehensive package of economic assistance that the EU allocated to support the Palestinian economy in its recovery form the virus crisis. The overall package amounts to around EUR 85 million of EU funds, which is expected to mobilise over EUR 400 million in soft loans and investment for the Palestinian private sector. The bulk of this assistance is to be channelled to the Palestinian economy through European Financial Institutions and reach the private sector through local banks and micro-finance institutions.
SMEs are the backbone of the Palestinian economy as they account for over 95% of local businesses, contribute more than 55% to the GDP, and employ 85% of the active working population. As a consequence of the Covid-19 outbreak, many companies have experienced a decrease in turnover and profitability, leading to payment delays and an increased demand for liquidity. It is now crucial to step up support to private sector businesses, thus helping to protect jobs and keep the economy going.
The National Bank (TNB) is the second largest Palestinian bank and the fastest growing in the country. TNB is one of the country’s most trusted providers of comprehensive financial services for the corporate, retail, investment and MSME sectors. TNB has executed the highest number of successful M&A transactions in the Palestinian banking sector. In 2015, TNB acquired Bank al Etihad’s operations in Palestine, and in 2018, TNB led a consortium acquiring a majority stake in the Palestine Islamic Bank (PIB) marking the largest transaction in the history of Palestine Stock Exchange. In 2020, TNB acquired the operations of the Jordan Commercial Bank (JCB) in Palestine. TNB’s total assets are USD 2.74 billion and its capital is USD 92 million.
The European Investment Bank (EIB) is the European Union's bank. It is the long-term lending institution of the EU and is the only bank owned by and representing the interests of the European Union Member States. The EIB works closely with other EU institutions to implement EU policy.
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© Press Release 2021