Palestine needs more sustainable and productive employment opportunities to accommodate the state’s growing population. Creating jobs would reduce poverty and improve quality of life, but many companies have been cut off from direct market contact and cannot find financing, limiting their ability to compete, grow, and add jobs. In addition, Palestine’s unstable business environment with substantial market failures and risks has deterred private investment as a result of the long-standing political turmoil imposing restrictions on access to markets, movement of goods and people, and lack of control over resources.
Implemented on behalf of the Palestinian Ministry of Finance (MOF), the Finance for Jobs project (F4J) addresses constraints to job growth in the West Bank and Gaza by developing innovative financing instruments to promote business investment and job creation.
Sample Activities
Design, test, and implement three innovative financial instruments.
Solicit proposals from early-stage investment funds for business development services.
With partner Social Finance, build and design a development impact bond (DIB), which relies on results to address the skills gap between labor supply and demand to improve employment opportunities in Palestine.
Develop a comprehensive model that captures the social and economic cost-benefit to assess the social, environmental, and economic impact of private investments that justify the rationale for public financial support to these investments that otherwise would not have the capacity to proceed.
Select Results
Entrepreneurship Ecosystem Matching Grant (EE-MG): This cost-sharing mechanism targets early-stage investment funds seeking to build a portfolio of startup and early-stage enterprises. So far, the EE-MG has helped mobilize private capital of $8.4 million by supporting 48 startups—creating 200 jobs.
Investment Co-Financing Facility (ICF): This risk-sharing grant mechanism provides commercially sound, job-creating, private sector investments that may otherwise not be considered viable due to market and institutional failures. The ICF helped launch a solar-powered industrial park, which will help create 620 jobs. ICF is also supporting other six investment projects in Palestine that are expected to create about 1,500 direct and indirect jobs. So far, 450 jobs have been created by these projects with about $34.8 million of private capital mobilization.
Development Impact Bond (DIB): This marks the first World Bank DIB to be implemented worldwide. The bond will catalyze the role of the private sector by crowding in both private sector capital and expertise to better incentivize employment outcomes. It will address unemployment through skills development of 1,250 graduates to improve their employability. So far, more than 720 young people, about 40 percent of whom are women, have been accepted into training programs; 490 young people have completed training, and 300 have found jobs—with more than $2 million in outcome payments repaid to investors.
Supported women through increasing job opportunities. In 2021, F4J project supported several startups under the EE-MG intervention, which created 42 jobs for women representing 63 percent of total jobs created. Under ICF, F4J contributed to the creation of 70 jobs for women so far. Lastly, the DIB program created 89 jobs, of which 46 jobs were for females representing around 52 percent.
The U.S. Agency for International Development (USAID) Africa Trade and Investment (ATI) program is designed to bolster the Agency’s ability to boost trade and investment to, from, and within the African continent.