The role of IsDB Group in supporting socioeconomic development in Palestine

IsDB provides US$35.7 million to Palestine to fight COVID-19 and leads several important initiatives aimed at job creation and economic empowerment of the Palestinians.

The Islamic Development Bank (IsDB) Group, will provide US$ 35.7 million COVID-19 emergency response funding, to the State of Palestine. This was confirmed by HE Dr. Bandar Hajar, President of IsDB, during a virtual meeting with Dr Muhammad Shtayyeh, the Palestinian Prime Minister and IsDB Governor for Palestine.

IsDB has begun implementing the first phase of the package through the Al-Aqsa Fund, with many medical supplies and equipment being procured to fight the pandemic.

Regarding the second phase of the project, the Chairman of the IsDB Group stated that the Palestinian government has provided the Bank with a proposal to support small and micro enterprises to be financed as part of the “Strategic Preparedness and Response Programme” (SPRP) announced by the Bank. He said that a proposal was being studied which would support and revive companies and small projects affected by the lockdown.

Dr Bandar Hajjar added that, to date, IsDB Group’s total interventions in the State of Palestine, from the Bank's own resources, has reached US$342 million. In addition, the Bank is managing and implementing a set of trust portfolios for Palestine in excess of US$2.2 billion, with total disbursement for projects within these portfolios in Palestine in the tune of US$1.9 billion to date. 

Dr Hajjar stressed that the IsDB was primarily a solidarity bank founded on partnership and cooperation. In this regard, he expressed sincere thanks to the Kingdom of Saudi Arabia, the headquarters country, which holds approximately 25% of the Bank’s capital, and is considered one of IsDB Group’s strongest supporters. Also, the Kingdom contributes over 37% of the capital of Islamic Solidarity Fund for Development (ISFD), which provides development services to the poor in member countries, including Palestine. Saudi Arabia is also one of the first and fastest countries to pay its financial contribution to the IsDB-managed Al-Aqsa Fund, as per the percentage agreed within the League of Arab States. This generous support has enabled the Group to work more effectively in Palestine, launching greater development initiatives, such as the Al Aqsa and Al-Quds Funds and other initiatives for the benefit of the Palestinian people.

It is worth noting that the Al-Aqsa and Al-Quds Funds were established at the initiative of the Kingdom of Saudi Arabia at the Arab Summit held in Cairo in October 2000, with total resources amounting to US$1 billion. Arab countries contributed approximately US$993 million to both Funds, and the volume of projects entrusted by the Arab financial bodies to the Al-Aqsa Fund from their annual allocations in support of development in Palestine amounts to US$588 million.

The Fund’s achievements include the construction and equipment of about 250 schools, the restoration of approximately 35,000 homes, the construction and equipment of approximately 50 hospitals and health centres, the economic empowerment of about 24,000 households, the reclamation of 60,000 dunums of agricultural land, and the paving of about 600 roads.

In March 2009, the Ministerial Council of the Cooperation Council for the Arab States of the Gulf decided to adopt a Gaza reconstruction programme, with financial resources of US$1.64 billion. The Programme’s Coordination Committee decided, at its first meeting, to call 25% of these resources to be managed by the IsDB in a joint portfolio. The volume of the projects within the Programme’s joint portfolio amounted to approximately US$368 million, including US$250 million from the Kingdom of Saudi Arabia. These projects have rebuilt thousands of war-affected homes, in addition to the reconstruction and equipment of all Gaza Strip hospitals, the restoration of dozens of schools, the construction of new schools, and the economic empowerment of over 5,000 households through small projects.

In 2018, the Bank established an International Investment Waqf Fund for Economic Empowerment of the Palestinian People with an initial capital of US$500 million, and the Bank contributed US$100 million to the Fund, in addition to US$52 million from the ISFD. The Economic Empowerment Fund for the Palestinian People aims at the economic empowerment of over 300,000 Palestinian households.

The IsDB also manages the grant of the Custodian of the Two Holy Mosques in the amount of US$150 million, in support of Awqaf in Jerusalem.