Palestine—Finance for Jobs (F4J)

Client: World Bank

Duration: 2016-2025

Region: Middle East and North Africa

Country: Palestine

Solutions: Economic Growth

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 insecure business environment with high costs and risks has deterred outside private investment, while a breakdown of trust and dialogue between the private sector and Palestinian Authority has undermined innovation and growth.

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 training.

W4J-pic.jpg

Sample Activities

  • Design, test, and implement three innovative financial instruments.
  • Solicit proposals from investment funds for cost-shared financing to improve performance of enterprises, and assist selected funds in enhancing their overall pipeline of invested businesses.
  • With partner Social Finance, build a financial model for a development impact bond (DIB) that meets the needs of the Palestinian Authority, service providers, employers, and investors, and identify DIB investors.
  • Develop a social cost-benefit analysis tool to assist the MOF and private-sector stakeholders in identifying industries and businesses with high job-creation potential for investment.

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 $7.7 million by supporting 48 startups—creating 20 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 650 jobs. ICF is also supporting other four investment projects in Palestine that are expected to create about 1,150 direct and indirect jobs. So far, 426 jobs have been created by these projects with about $29 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 2,000 graduates to improve their employability. So far, more than 655 young people, about half of whom are women, have been accepted into training programs; 448 young people have completed training, and 167 have found jobs—with more than $2 million in outcome payments repaid to investors.
x

RELATED CONTENT:

Ethiopia—Technical Assistance Programme to Support Lending Operations to the Women’s Entrepreneurship Development Project (WEDP)

The Technical Assistance Programme to Support Lending Operations to the Women’s Entrepreneurship Development Project (WEDP) works to reduce unemployment in Ethiopia by offering women improved access to a diverse and responsible range of financial products aimed at encouraging income generation and business growth.

Read More