European Union and World Bank sign a €9 million agreement to support Palestinian Economy – occupied Palestinian territory

Today, at the margins of the 2022 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) held in Washington from 10 to 14 October, the European Union signed an agreement with the World Bank to provide a €9 million initial EU funding contribution through the newly set up Single-Donor Trust Fund for the EU Support for the Palestinian Economy and Resilience (ESPERE. These EU funds will finance activities with the World Bank in the West Bank and Gaza with the aim to support the improvement of the Palestinian business environment.

Henrike Trautmann, Acting Director for Neighbourhood South and Türkiye at the Directorate-General for Neighbourhood & Enlargement Negotiations said: ‘Over the past months we have discussed closely with the World Bank how to strengthen our cooperation in the Southern Neighbourhood region and respond to the needs of our partners. By contributing to the EU Support for the Palestinian Economy and Resilience (ESPERE) Single-Donor Trust Fund, the EU will provide support in key areas such as the implementation of the Companies Law and the development of digital entrepreneurship ecosystem in the West Bank and Gaza’.

‘’Through this partnership with the World Bank and contribution to this joint programme, the EU aims to enhance its support to the Palestinian Authority and to improve the Palestinian business environment and accelerate private investments, notably in the digital sector. This programme is part of our wider engagement within the Team Europe Initiative for Sustainable Growth and Jobs in Palestine and directly complement our efforts to accelerate the roll-out of the European External Investment Plan. This aims to addressing challenges and obstacles facing Palestinian businesses in West Bank and Gaza and create new opportunities for private investments contributing to a green, inclusive and sustainable growth. The EU is committed to continue its engagement and support to the Palestinian private sector that is a corner stone in the establishment of the future independent Palestinian state,’’ said the Deputy EU Representative Maria VELASCO.

Creating the conditions for a more conducive business environment will allow to unlock additional private investments. This is central to the Team Europe Initiative on Sustainable Growth, Jobs and Resilience and the work of the European-Palestinian Investment Platform. In addition, through the Gaza Gateway Outsourcing Hub, the EU will support the development of the digital entrepreneurship ecosystem in Gaza, a key factor to overcome constraints linked to movement of people and goods.

Background

The EU and the Word Bank have a long-standing partnership to provide support to partners in the EU’s Southern Neighbourhood, including to strengthen the Palestinian economic reform, social resilience and sustainable recovery. The EU and the World Bank share common objectives in a variety of areas aligned to the pillars of the European Joint Strategy in Palestine. So far, the projects are jointly funded via the Palestinian Umbrella for Resilience Support to the Economy (PURSE), and encompass private sector development, public finance management, water and energy and enhancing human development. The PURSE provides support under the following pillars:

• Macro-fiscal stability and public financial management;
• Human Capital and Service Delivery;
• Financial and Private Sector Development and Job Generation;
• Social protection to the Poor and at-risk Population.

The Single Donor Trust Fund, through which the EU and the World Bank agree to cooperate in Palestine, is associated to PURSE and is a country-level pilot initiative for possible EU cooperation with the World Bank in other MENA countries and at regional level.