EU implements Palestine facility with $395 million for local banks and €2.1 million in technical assistance

• The European Investment Bank (EIB) and the European Commission are launching the implementation of the €400 million facility announced in October 2025 by making available up to $395 million for Palestinian micro, small and medium sized enterprises (MSMEs).
• The funds will be channelled through Bank of Palestine, The National Bank, Quds Bank, Cairo Amman Bank and Palestine Investment Bank to expand access to credit through local financial intermediaries.
• The package also includes the deployment of the remaining €2.1 million in technical assistance under a total €3.5 million envelope, of which €1.4 million has already been deployed.

Today, the EIB and the European Commission are launching the implementation of the €400 million financing facility first announced in October 2025 through the signature of sub-MSME loan agreements between the Palestine Monetary Authority (PMA) and Bank of Palestine for $150 million, Quds Bank for $100 million, Palestine Investment Bank for $70 million, The National Bank for $50 million, and Cairo Amman Bank for $25 million.

These agreements make available up to $395 million to support Palestinian MSMEs through local financial intermediaries. The package also includes the deployment of the remaining €2.1 million in technical assistance under a total €3.5 million envelope, of which €1.4 million has already been deployed, to strengthen the broader ecosystem for Palestinian micro, small and medium sized enterprises by supporting MSMEs directly, as well as financial institutions and sectoral initiatives.

By working through the PMA and local partner banks, the implementation of the facility will help expand access to affordable financing for Palestinian businesses that continue to face severe economic pressure in the context of the ongoing conflict. The operation will help direct much needed liquidity to MSMEs, sustain business activity and jobs, and strengthen economic resilience.

The €400 million operation forms part of the European Commission’s “Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience”, a total envelope of up to €1.6 billion for 2025 to 2027, including around €620 million in grants to support the Palestinian Authority and around €576 million for projects, when conditions allow, to foster recovery and resilience in the West Bank, East Jerusalem and Gaza.

“Palestinian businesses need reliable access to finance if they are to continue operating, investing and protecting livelihoods under extremely difficult conditions,” said EIB Vice-President Gelsomina Vigliotti. “With these agreements, we are putting into operation the €400 million facility announced in October 2025 and making available up to $395 million through local partner banks to support Palestinian MSMEs where financing is most needed. At the same time, €3.5 million in technical assistance will help reinforce the sector at multiple levels.”

Palestine Monetary Authority Deputy Governor Mohammad Manasrah said: “The implementation of this $395 million package marks a concrete step in reinforcing the Palestinian financial sector’s ability to support businesses during a period of exceptional strain. Through five sub loans to local banks — part of which is structured as sub-debt to strengthen banks’ capital base — while the use of proceeds remains exclusively directed toward financing micro, small and medium sized enterprises, this cooperation will broaden access to financing across Palestine, enabling businesses to continue operating, adapt to difficult conditions and sustain economic activity. The Palestine Monetary Authority values its partnership with the European Investment Bank and local financial institutions in helping channel this support where it can make a meaningful difference for enterprises, families and communities. ”

Acting Director-General of the European Commission’s Directorate-General for the Middle East, North Africa and Gulf Michael Karnitschnig said: “The EU’s €400 million Palestine Facility is delivering. By channelling $395 million through local banks and providing €2.1 million in technical assistance, we are putting vital financing directly at the disposal of Palestinian businesses. This is not just an investment in enterprises; it is an investment in jobs, resilience, and the future of Palestinians”.

Since 1995, the EIB has provided financing worth some €1 billion in Palestine, as well as risk sharing instruments supporting Palestinian small and medium sized businesses for an additional €120 million. The EIB has long worked with local financial institutions and public sector partners to improve access to finance, support essential infrastructure and strengthen economic resilience in Palestine.

Background information

The EU and Palestine

The EU is a long-standing partner of the Palestinian people and advocate for a Two-State solution with Israelis and Palestinians living in security and in peace side by side. It has shown its support both politically and financially. Supporting a strong and viable governance by the Palestinian Authority is key to achieve a sustainable and long-term peace, for the Palestinian people and the region as a whole.

In April 2025, the Commission adopted a €1.6 billion Multiannual and Comprehensive Programme to support Palestine’s Recovery and Resilience, covering the next three years. The programme is currently under implementation. Since October 2023, the EU commitments amount to almost €740 million in grants and loans.

The EIB Group

The European Investment Bank (ElB) Group is the financing arm of the European Union, owned by the 27 Member States, and one of the largest multilateral development banks in the world. In 2025, the EIB Group signed €100 billion of new financing and advisory services for over 870 high-impact projects in eight core priorities that support EU policy objectives: climate action and the environment, digitalisation and technological innovation, security and defence, territorial cohesion, agriculture and the bioeconomy, social infrastructure, strong global partnerships and the savings and investment union. Beyond long-term loans for large infrastructures, the EIB Group crowds-in private investment for high-risk innovative projects and businesses, with a growing role in Europe’s markets for venture debt, venture capital, guarantees and securitisations.

The European Investment Fund (EIF) is the subsidiary of the EIB Group specialised in providing guarantees and equity to improve access to finance for small and medium size businesses and startups across Europe. Acting as an anchor investor, through its extensive network of partnering banks and investment funds, the EIF mobilizes private investment and nurtures the ecosystem of venture capital funds to support innovative European entrepreneurs.

EIB Global

EIB Global is the EIB Group’s specialised arm devoted to increasing the impact of international win-win partnerships and development finance, and a key partner of Team Europe and the Global Gateway strategy. EIB Global brings the EIB Group closer to people, companies and institutions through its offices across the world.

EIB and Palestine

The EIB has been operating in Palestine since 1995 with EUR 1.15bn investments and has contributed over the years to improve infrastructure endowment and support economic development. It is the only European Multilateral Financial Institution able to provide sovereign loans to the Palestinian Authority, focusing on infrastructure like water and energy. The EIB is also the lead player in supporting Micro-, Small- and Medium-sized Enterprise in Palestine through a €EUR 700 million funding package, complemented by risk sharing instruments and advisory services.

About the Palestine Monetary Authority

The Palestine Monetary Authority (PMA) is the independent central institution responsible for regulating and supervising the Palestinian banking and financial sector. Since its establishment in 1994, the PMA has worked to safeguard financial stability, promote economic growth, and ensure the soundness of the Palestinian financial system. Acting as a modern and resilient central bank without a national currency, the PMA manages payment systems, oversees financial institutions, and develops inclusive policies to enhance access to finance for individuals and businesses. The PMA plays a vital role in supporting Palestine’s economic resilience by fostering a safe, transparent, and competitive financial environment that serves the needs of households and enterprises across the West Bank and Gaza.