The Economic Empowerment Fund for Palestinian People (EEFPP)

A new fund set up by IsDB will assist more than 300,000 Palestinian families over the next decade

The EEFPP is expected to fulfil its mandate through the following modes of intervention:

Establishment of economic empowerment financial institutions in Palestine
Provision of lines of financing (LoF) to local banks and FIs to be leveraged to finance economic empowerment projects in Palestine
Equity participation in FIs and high-impact private sector companies and businesses
Provision of LoF to the economic empowerment programmes and projects
Capacity development, research, technical studies, M&E
Short-term investments
Investing in other funds or vehicles serving the mandate of the EEFPP.

The EEFPP will work in full partnership with the private sector as well as financial and non-financial institutions in Palestine and will coordinate with relevant government bodies such as the Palestinian Monetary Authority (PMA), the Palestinian Investment Promotion Authority (PIPA), the Palestinian Capital Market Authority (PCMA), and the Ministry of Economy and Social Development.

IsDB set up the Fund with an initial target capital of US$ 500 million and will contribute a further US$ 100 million. It is hoped that the Fund will help empower more than 300,000 Palestinian families in the next decade

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Economic Empowerment as an Effective Poverty Reduction Mechanism: Success Stories From Palestine

"IsDB set up the Fund with an initial target capital of US$ 500 million and will contribute a further US$ 100 million. It is hoped that the Fund will help empower more than 300,000 Palestinian families in the next decade"

Purpose

The IsDB’s Economic Empowerment Fund for the Palestine People (EEFPP) is a US$500 million impact investment vehicle/fund that provides blended finance in the form of equity capital and structured financing, in addition to technical assistance.
The EEFPP goal is to reduce poverty, empower the poor, and lessen aid-dependency amongst the Palestinian People. and to develop a solid and sustainable ecosystem, transforming the poor from mere recipients of financing to real business partners.
The EEFPP will contribute to strengthening the involvement of youth and poor families in local value chains through a variety of projects. In doing so, it is fully compatible with IsDB’s new business model and GVC approach.
The economic empowerment approach, as envisioned by the P5P, will be a catalyst and facilitator for IsDB’s implementing partners to act as market developers.

Objectives

Improve the livelihood and resilience of youth, poor and marginalized groups in Palestine
Achieving financial and social returns with measurable impact.
Provide an investment platform to channel financial and non-financial resources to MSMEs, cooperatives, unions and solidarity groups ..etc., in accordance with sharia/Islamic principles.

Method

The EEFPP applies global best practices in governance and investment management in its work with poor and unemployed youth in Palestine. A seasoned External Fund Manager (GP) with international experience and strong track record in impact investments, will be hired to manage the investments and operations of the EEFPP.
The EEFPP builds on the successes of IsDB Deprived Families Economic Empowerment Programme (DEEP), an IsDB economic empowerment pilot programme which has achieved tangible success in its objective of promoting Islamic microfinance in Palestine and focuses on:
Economic viability standards
Investment concepts (cost and profit)
Advanced mechanisms, knowledge and field experience that work in harmony to create the desired social and economic goals.
To take advantage of the successful IsDB DEEP initiative and its economic and social impacts and reach a larger group of Palestinians, IsDB set up the EEFPP, with an initial target capital of US$ 500 million.
IsDB will also contribute a further US$ 100 million (20% of the target capital) to the Fund’s capital.
IsDB envisions that the new fund will empower more than 300,000 Palestinian families in the next decade.
The EEFPP is founded on a scientific economic vision, striving to establish an integrated framework and interlocking all economic fields in order to achieve the following objectives:
Resource sufficiency to cover the major needs of the target population
Scaling-up IsDB’s economic empowerment interventions in Palestine
Supporting the economic development and contributing to strengthening the resilience and immunity of the Palestinian economy
Developing and disseminating the concept of economic empowerment through Islamic finance mechanisms.

Achievements

One year after its establishment, the Fund mobilised an additional US$ 120 million from various partners, which increased its capital to US$ 220 million, or 44% of the final target.
This success comes at an early stage of the Fund’s operation and ahead of a comprehensive planned resource mobilisation activity.
Regarding the Fund’s governance, the Board of Shareholders has met three times under the chairmanship of the IsDB President, and the Management Committee has met five times.
The Fund’s Board adopted the internal regulations of the Board of Shareholders and the Management Committee, the investment procedures and management rules, the reporting system, the LoF guidelines, and the business model of due diligence for LoF applicants.
The Fund’s team reviewed six investment opportunities, four of them approved by the Management Committee for further due diligence. The six investments will be transferred to the new hired Fund Manager.
The IsDB BED approved the amendment of the fund structure and adopt the LP/GP governance framework and authorised the IsDB to hire a top-notch Fund Manager.
The IsDB finalise the selection process of the Fund Manager which approved by the Fund Council of Participants.

Investment