WASHINGTON, D.C., APRIL 22, 1999 – The
International Finance Corporation today signed agreements to invest a total
of US$28.4 million in the West Bank and Gaza, including $19 million for
a housing project and $9.35 million for a tourism project.
The investment in the Palestinian Mortgage Housing Corporation (PMHC),
a joint IFC-World Bank project, will help alleviate the acute need for
housing in the West Bank and Gaza. IFC's investment includes a loan of
up to $15 million and an equity investment of up to $4 million, which would
represent 20 percent of the company's share capital. The World Bank has
provided cofinancing to PMHC in the form of a $17 million loan. The project,
which is estimated to cost $72 million, will generate an estimated 3,400
jobs annually from increased demand for housing construction.
Since long-term mortgage financing is unavailable, most homebuyer transactions
today are done on a cash basis, which only Palestinians in the high-income
bracket can afford. PMHC will encourage long-term mortgage financing, making
homes more affordable and increasing home ownership.
Mohsen Khalil, IFC Director for Central Asia, the Middle East, and North
Africa said that the housing project addresses one of the most pressing
social problems in the West Bank and Gaza. It will enable Palestinians
to move from overcrowded dwellings to become homeowners, and improve living
conditions. He added that the project would spur the development of local
capital markets and the economy as a whole.
Technical assistance to the project was financed through IFC's collaborative
trust fund with the Canadian International Development Agency (CIDA). CIDA
has also committed up to C$2.5 million for technical assistance on institution
Partners in the project are the Ministry of Finance, the Ministry of Housing,
the Palestinian Monetary Authority, Deutsche Investitions-und Entwicklungsgesellschaft
mbH (DEG), and the Palestinian private sector, including Palestine Development
and Investment Company (PADICO) and Arab Bank.
IFC's investment in the Palestine Tourism Investment Company (PTIC) Ltd.
will help build and operate the first international standard hotel in the
West Bank city of Bethlehem.
The Bethlehem Jacir Palace Hotel is the single largest construction project
to date in the Palestinian private sector. The project will complement
the Bethlehem 2000 Project, a program of major events, infrastructure renewal
and tourism development, supported by the World Bank and major donor countries.
IFC's investment consists of up to US$8 million in loans and $1.35 million
in equity for about 5 percent of PTIC's share capital. The European Investment
Bank is making a parallel loan of Euro 12 million (US$13.2 million equivalent).
Total project costs are estimated at $48 million. The 250-room hotel, which
will be managed by an international hotel operator, would set the standard
for quality for tourist and business clientele visiting the West Bank.
The project will help promote tourism in the West Bank and Gaza, which
is rich with archaeological sites of religious and cultural significance,
said Mr. Khalil. He added that the project is expected to generate substantial
foreign exchange earnings from the influx of tourists staying in Bethlehem,
and will bring a significant number of jobs to the area.
PTIC is one of the affiliated companies established by PADICO to promote
and invest in tourism related projects in the West Bank and Gaza.
IFC projects in the West Bank and Gaza help generate employment, increase
foreign exchange earnings and, most importantly, build institutions. In
fiscal year 1999, IFC approved close to $30 million in financing for four
projects in the agribusiness, housing, and tourism sectors of the West
Bank and Gaza. Total project costs are estimated at $132.2 million. Since
its lending program for the West Bank and Gaza began in 1994, IFC has approved
13 investments worth over $459 million in total project costs. Of this,
IFC has directly financed $130 million.
IFC, part of the World Bank Group, fosters economic growth in the developing
world by financing private sector investments, mobilizing capital in the
international financial markets, and providing technical assistance and
advice to governments and businesses.
The Investment Team involved with PMHC is listed as follows: Mohsen Khalil,
Director, Iyad Malas, Manager, Tamara Lansky, Lead Investment Officer/Country
Coordinator, Paolo Spagnoletto, Investment Officer, Koichi Kawaguchi, Investment
Officer, Fady Zeidan, Lawyer, Todd Hanson, Environmental Specialist, Kelly
Johnson, Economist, Lawrence Hannah, Lawyer-World Bank, Salem Rohana, Field
Office Representative, Ahlame Moustakbal, Staff Assistant, and Ofelia Paddayuman,
Staff Assistant .
The Investment Team involved with PTIC is listed as follows: Mohsen Khalil,
Director, Khosrow Zamani, Associate Director, Tamara Lansky, Country Coordinator,
Kunio Kikuchi, Lead Investment Officer, Paolo Spagnoletto, Investment Officer,
G.A.W. Bourke, Lawyer, Maurice Desthuis-Francis, Environmental Specialist,
Kelly Johnson, Economist, Salem Rohana, Field Office Representative, Babita
Shrestha, Staff Assistant, and Ofelia Paddayuman, Staff Assistant.