The European Union Provides $395 Million to Support Palestinian Banks Along with €2.1 Million for Technical Assistance

SadaNews - The European Investment Bank and the European Commission are launching today the implementation of facilities worth €400 million, first announced in October 2025, through signing subsidiary loan agreements for the benefit of micro, small, and medium enterprises between the Palestinian Monetary Authority and Bank of Palestine for $150 million, Bank of Jerusalem for $100 million, Palestinian Investment Bank for $70 million, National Bank for $50 million, and Cairo Amman Bank for $25 million.

These agreements provide up to $395 million to support Palestinian micro, small, and medium enterprises through local financial intermediaries. The package also offers the remaining funding of €2.1 million for technical assistance, from a total portfolio of €3.5 million, of which €1.4 million has already been provided, aimed at significantly enhancing the Palestinian micro, small, and medium enterprises through direct support, as well as to financial institutions and sectoral initiatives.

Thanks to cooperation with the Palestinian Monetary Authority and partner local banks, executing these facilities will contribute to increasing access to affordable financing for Palestinian companies that continue to suffer from severe economic pressures amid the ongoing conflict. This initiative aims to provide crucial liquidity to micro, small, and medium enterprises, sustain business activity, maintain jobs, and enhance economic resilience.

These facilities, worth €400 million, are part of the "Comprehensive and Multi-Annual Program to Enhance Recovery and Resilience in Palestine" by the European Commission, with a total financial portfolio amounting to €1.6 billion during the period from 2025 to 2027, including €620 million in grants dedicated to support the Palestinian Authority, and around €576 million for projects aimed at enhancing resilience and recovery in the West Bank, East Jerusalem, and the Gaza Strip, when circumstances allow.

In this context, Gelsomina Flioti, Vice President of the European Investment Bank, stated that "Palestinian companies need reliable financing sources to continue their operations and investment activities and to maintain their livelihoods amid extremely tough conditions." She added: "In light of these agreements, we are starting to implement the €400 million facilities announced in October 2025, providing up to $395 million through partner local banks to support Palestinian micro, small, and medium enterprises in areas that have urgent financing needs. Meanwhile, the technical assistance of €3.5 million will help strengthen this sector on multiple levels."

Mohammed Mansour, Deputy Governor of the Palestinian Monetary Authority, also stated: "The implementation of the package of facilities worth $395 million represents a tangible step in enhancing the ability of the Palestinian financial sector to support companies during this period of exceptional pressures. With the assistance of five subsidiary loans granted to local banks - part of which is structured as subordinate debt to strengthen the capital base of these banks while the proceeds remain exclusively allocated to financing micro, small, and medium enterprises - this cooperation will enhance opportunities for companies to access financing throughout Palestine, enabling them to continue performing their activities, adapt to difficult conditions, and sustain economic activity. The Palestinian Monetary Authority values its partnership with the European Investment Bank and local financial institutions, contributing to directing this support where it can make a real difference for companies, families, and local communities."

For his part, Michael Carnetchnik, the acting Director General of the Directorate-General for the Middle East, North Africa, and the Gulf, stated: "The implementation of the €400 million facilities provided by the European Union for Palestine has begun to achieve its desired goals. By directing $395 million to Palestinian companies through local banks and providing €2.1 million in technical assistance, we are providing these companies with vital financial resources directly. This is not just an investment in companies but an investment designed to create job opportunities, enhance resilience, and provide a promising future for Palestinians."

It is noteworthy that since 1995, the European Investment Bank has provided around €1 billion in financing to Palestine, in addition to risk-sharing instruments to support small and medium-sized Palestinian companies with an additional €120 million. The European Investment Bank has long collaborated with local financial institutions and public sector partners to improve access to financing, support essential infrastructure, and enhance economic resilience in Palestine.