Bank of Palestine, Cairo-Amman Bank, Proparco and the EU launch the second phase of the SUNREF green finance program in Palestine

The initiative comes as a joint effort of Team Europe partners, the Palestinian Authority and private sector institutions to foster European investment in Palestine contributing to job creation, sustainable growth and welfare. Overall, six agreements were signed today for an amount of around EUR 200 million between the EU, Palestinian Banks, Proparco and its German counterpart KfW.

SUNREF is the Green finance program of the AFD Group, which provides solutions to promote the renewable energy and environmental transition of private players. It is particularly relevant in Palestine given the high cost of energy, limited supply of electricity and increasing demand. The program is fully aligned with Palestinian national priorities to encourage investment in renewable energy sources as well as energy saving investments in the private sector.

SUNREF Palestine is a joint program of AFD Group and the EU. Launched in 2018, the first SUNREF program (SUNREF I) in Palestine was set up to support local banks in stimulating a nascent market by increasing their lending to green energy projects. SUNREF I was financed by € 25 million in credit lines provided by AFD to BOP and CAB as well as EU funding (€8M). After 3 years of operations, SUNREF I can be labeled a success, with over 215 investments supported, primarily in the renewable energy field.

Supporting energy efficiency projects in Palestine

SUNREF II Palestine comprises two new features: an increased focus on energy efficiency and the inclusion of an Islamic-lending offer for final beneficiaries.

The SUNREF II credit lines are signed with two major Palestinian banks and long-standing partners of AFD group: Bank of Palestine ($30 million) and Cairo Amman Bank ($25 million). The banks, and their Islamic subsidiaries (Arab Islamic Bank and Safa Bank), have identified significant potential for energy efficiency investments with a capacity to provide wide benefits in terms of energy savings.

The program comprises a European Union grant of €11.5 million to finance investment incentives and technical assistance (TA) to help unlock demand and stimulate the sourcing of investments, especially in the more innovative and risky sector of energy efficiency.  

Through this package, the SUNREF II program provides solid tools for the two Palestinian banking groups to continue expanding into green finance and supporting their clients particularly in the field of energy efficiency.

The Prime Minister of Palestine, Dr. Mohammad Shtayyeh, said: “The EU–Palestine Investment Platform has quickly become one of our main initiatives in support of the Palestinian SMEs, especially those affected by Covid19 in the West Bank, including Jerusalem and Gaza Strip. Today’s agreements demonstrate once again the EU solidarity with the Palestinian people which aim to empower the Palestinian economy and promote economic opportunities for business and young entrepreneurs.“

The European Union Representative, Sven Kühn von Burgsdorff, said: “Only one year ago we launched a new policy forum to better attract European investment in Palestine, the EU – Palestine Investment Platform. Today I am delighted to announce another package of Team Europe investments in support of the Palestinian private sector. This is a sign of trust in the viability of the Palestinian economy, demonstrating its resilience and ability to recover from the manifold recent crises, including the economic fallout of the COVID19 pandemic and the hostilities in Gaza. I trust that this package of financing will empower Palestine to build back better its economy, make it greener and more inclusive, paving the way to prosperity, welfare and a better quality of life for the Palestinian people.“

Sarah Morsi, Proparco’s regional director for the Middle East attended the ceremony and stated: “Proparco is particularly pleased to sustain this long-standing collaboration with BOP, CAB and the EU. This project is fully aligned with AFD Group’s ambitious climate strategy. It also illustrates Proparco’s strong commitment to Palestine. Since the beginning of its activity in Palestine in 2016, Proparco committed $100 million of financing to support the private sector.”

Hashim Shawa, BOP’s Group Chairman who also attended the ceremony commented: “Bank of Palestine Group is proud to build further its collaboration with Proparco which translates our sustainability and financial inclusion strategies into concrete actions and impact towards a greener and more inclusive Palestine. After the success of Sunref I and with a greater focus on energy efficiency in Sunref II, we hope to build and grow a community that supports clean energy projects particularly SMEs aiming at developing the economy, sustaining the environment and providing society with higher quality standards of living. Together, with our partners and all stakeholders we pledge to make a positive impact throughout our sustainability commitments and values-rooted vision. We would like to thank Proparco and the AFD Group for their steadfast engagement in the Palestinian economic development including the EU’s grant to finance the technical assistance projects.”

Joseph Nesnas, Deputy General Manager and Regional Manager of CAB Palestine, noted: “The successful experience accomplished in SUNREF I, assured that our participation in SUNREF II is very essential. It is an important step towards encouraging our clients to use green energy solutions, Moreover, benefit from the two vital components of the program namely the technical assistant and the investment grant. We acknowledge this partnership with AFD Group and EU, looking forward to starting the second phase of SUNREF”.

About AFD Group

AFD Group implements France’s policy in the areas of development and international solidarity. The Group includes Agence Française de Développement (AFD), which finances the public sector and NGOs, as well as research and education in sustainable development; its subsidiary Proparco, which is dedicated to private sector financing; and Expertise France, a technical cooperation agency. The Group finances, supports and accelerates transitions towards a fairer, more resilient world.

With our partners, we are building shared solutions with and for the people of the Global South. Our teams are at work on more than 4,000 projects in the field, in the French Overseas Departments and Territories, in 115 countries and in regions in crisis. We strive to protect global public goods – promoting a stable climate, biodiversity and peace, as well as gender equality, education and healthcare. In this way, we contribute to the commitment of France and the French people to achieve the Sustainable Development Goals (SDGs). Towards a world in common.

About the European Union External Investment Plan (EIP)

The EU’s ambitious External Investment Plan (EIP) has been set up to encourage investment in its partner countries. It is promoting inclusive growth, job creation and sustainable development. The Plan is crowding in private and  institutional investors, where viable business proposals meet social needs, and where limited public funds can attract private money.   

About the EU – Palestine Investment Platform 

The EU – Palestine Investment Platform was established by the European Union (EU) and Prime Minister’s Office (PMO) in an effort to foster policy dialogue on investment and to help better identify, prioritise, coordinate and promote investment opportunities that the EU External Investment Plan offers through its many instruments in Palestine. This high-level forum serves to discuss policy priorities and investment pipelines in order ensure alignment of publicly sponsored investments with political, policy and reform priorities of Palestine.