Ramallah, 18th of July 2018: Bank of Palestine signed an agreement with the French Development Agency (AFD) in cooperation with the EU to finance green and renewable energy projects with a 12.5 million Euro in a specially designed program called SUNREF. The project takes a strategic view towards leveraging finance toward green and energy sustainable projects in Palestine. The scheme will also cover retail, industrial, tertiary and agricultural sectors in order to replace high energy consumption equipment with more efficient and energy saving equipment.
The agreement will be financing projects in both West Bank and Gaza and will be in all green related filed: environment, pollution, energy efficiency and solar energy. The Facility’s main objective is to support the transition of the Palestinian enterprises, in particular SME towards a ‘Green’ economy. Also eligible are publicly held companies operating under the rules of market. The program has three key objectives:
To create and mature a market for ‘Green’ investments reinforcing services and technologies with a positive environment/ climate impact in line with the strategic objectives of the EU Joint Programming and national policy objectives;
To improve capacity of Bank of Palestine to appraise and finance ‘Green’ projects by providing medium to long-term funding, grant and technical assistance;
To raise public awareness for ‘Green’ projects among enterprises and individuals on the inherent financial benefits and security of supply thereby stimulating innovation and development.Bank of Palestine views this partnership in line with its financial inclusion strategy, within an added focus to work on green and energy sector projects in order to develop a positive impact on the economy, given the fact that this project will help reduce consumption of energy and will give green alternatives in the productive cycle of SMEs. The project is also targeting all segments; such as retail and households and will help these segments by replacing the high consumption equipment in addition to providing help in self-production of energy when needed. In the industrial sector, the program will enhance the renewable energy component by increasing the energy efficiency and reduce the water consumption. Program shall equally target Tertiary sectors such as hotels, offices, hospitals, super markets and other. Finally the agricultural sector will be able to have positive inputs as a result of energy efficiency in irrigation and biogas technology. This program will help Bank of Palestine in further lending towards more green projects and help build capacity in financing green and renewable energy projects, thus contributing to sustained organic growth of the bank at home.
Bank of Palestine has grown in the last 10 years from USD$ 500 million in assets to almost USD$ 5 Billion in assets representing 40% of GDP. The bank is one of the largest private sector employers with almost 1 million customers with market share of 30% of the Banking Industry in Palestine. Today the bank is the number one lender to the Small & Medium Enterprise sector; a key job-creating sector that represents 90% of the Palestinian economy. The bank owns PalPay a Fintech Company providing e payment solutions serving 50% of the population that are still unbanked. Since listing on the Palestine Exchange, the bank has become 16% of the market capitalization of the Exchange. The Bank is proud to have provided both a financial ROE and a social ROE to its shareholders as it continues to strive to be a bank providing profit with purpose. The SUNREF program is in line with the bank’s value in providing both financial inclusion to its customers and best practices in environment management and sustainable economic development.
Bank of Palestine had previously successfully worked with AFD on the Ariz loan guarantee program, for corporate loans, the program started in 2014 with a portfolio of $4 million, the second phase was in 2016 with a portfolio of $9 million the last one was in 2018 with a $9 million portfolio. The portfolio financed 255 projects in a range between $20,000 to $300,000 per project in various sectors.