WASHINGTON, D.C., Jan. 20—The International
Finance Corporation (IFC)—the private sector arm of the World Bank Group—is
joining forces with the Peres Center for Peace (Peres Center), Capital
Investment Management Corporation (Capital Group), and Evergreen Canada
Israel Investments Ltd. (Evergreen Group) to set up a first-of-its-kind
Peace Technology Fund (PTF) to boost private sector activity in the West
Bank and Gaza and to encourage greater understanding through the promotion
of sound business relationships.
The Fund’s purpose is to form partnerships between Palestinian and Israeli
investors and also bring in the international community to invest in a
broad range of sectors. The injection of much-needed capital into
the Palestinian economy will facilitate technology and know-how transfer,
job creation opportunities, and managerial and production skills enhancement.
Investors will be attracted by the above average returns, the productive
Palestinian workforce, favorable trade agreements with the U.S. and European
Union as well as access to regional and global markets. The international
community is already showing great interest in this ground-breaking partnership.
A Memorandum of Understanding was signed to this effect in Paris today
by Mr. Yasser Arafat, President of the Palestinian Authority; Mr. Shimon
Peres, President of the Peres Center; Mr. Hani Masri for the Capital Group;
Mr. Jacob Burak for the Evergreen Group; and Mr. James D. Wolfensohn, President
of the World Bank Group on behalf of IFC.
The PTF is structured on a representational basis, bringing together international
Palestinian and Israeli private sector investors and managers. The
committed capital from the private sector will be US$100 million, with
30% from Palestinian/Arab investors, 30% from Israeli investors, 30% from
international investors, and a minimum 10% commitment from IFC.
Investments by the Fund will normally be in minority positions of privately-held
Palestinian companies. It will seek representation on the board of
directors of the portfolio company and certain key rights, including protection
of minority shareholders.
Joint ventures will be promoted between Palestinian and Israeli enterprises,
encouraging investors to establish business ties with existing entrepreneurs,
and start up new companies.
Mr. Wolfensohn said, “We are very proud to be associated with this Fund,
which is the first of its kind to promote investment opportunities involving
the Palestinian and Israeli business communities. The PTF will create
business opportunities, reduce unemployment through job-creating investments,
open new markets and increase foreign exchange earnings. We view
it as a very positive development on the road to peace and prosperity in
The PTF will invest primarily in small and medium-sized companies across
a broad range of high tech/high value-added industrial sectors in the West
Bank and Gaza, including companies locating at the Gaza Industrial Estate.
High tech sectors being considered are computer hardware, software
and information technology training, publishing and consultancy; electronic
and electric office equipment; and telecom equipment and software. Other
sectors include apparel and textiles; food production and processing; tourism
and lodging; selected manufacturing (component manufacturing using machine
tools and plastic molding); general manufacturing (including technology
upgrading); and infrastructure (roads, bridges, port facilities, electricity,
water supply, sewerage and solid waste disposal).
The Peres Center is a non-profit and non-partisan organization based in
Israel. The Capital Group represents the Palestinian fund manager
based in the West Bank and Gaza, and the Evergreen Group represents the
Israeli fund manager based in Israel. IFC is the largest multilateral
source of equity and loan financing for private sector projects in developing